The TANDET Group has faced some tough choices in the midst of the current economic downturn, and few of them were more troubling than the decision to reduce payroll costs. After all, skilled employees...
The TANDET Group has faced some tough choices in the midst of the current economic downturn, and few of them were more troubling than the decision to reduce payroll costs. After all, skilled employees are vital to the future of any business.
But the company discovered an alternative to layoffs in the form of the federal Work Sharing program -an initiative that offers Employment Insurance benefits to those who agree to a shortened work week.
The program’s Employment Insurance benefits are capped at 55% of average insured earnings up to a maximum of $447 per week or $89.40 per day. After a few calculations, The TANDET Group discovered that participating workers who agreed to a 20% wage cut and a day off each week actually took home almost the same amount of pay that they would have received if wages had simply been cut by 10%.
“Everybody wins,” says human resource manager Catherine Magill.
Workers are also able to maintain other benefits including vacation days and the right to Employment Insurance benefits in the event they need to be laid off before the program is completed. The company, meanwhile, retains skilled employees for the days when they are required.
Participants in the program can be called in to work during “Work Share” days for up to six consecutive weeks.
“We are hearing about people who are volunteering to take holidays without pay, or working a specific number of days without pay, but this program offers an option that many fleets may not have thought about,” says Linda Gauthier, executive director of the Canadian Trucking Human Resources Council.
There has also been an unexpected benefit to the initiative. It has shown participating employees that they are seen as vital to the future of the company, Magill adds. “It gave the employees the message that ‘You are one of my key employees. You are here because we need you to be here on the other end.'”
The program itself isn’t new, but the related administrative burden has been eased. It has also been extended to last between six and 52 weeks. Applicants simply need to fill out a limited amount of paperwork and submit a brief Recovery Plan to demonstrate that the reduction in hours is temporary and unavoidable. This plan needs to include:
• Business Description –a general 50-word description about the organization, the length of time the company has been in Canada, head office address, the number and location of branches, a comparison of sales over the last two years, and a list of typical clients, customers and markets served. The plan also needs to reference the organization’s history with HRSDC/ Service Canada programs.
• Employee Description –showing the number of unionized and non-unionized employees, along with the full name of any applicable union and local number.
• Plan for Recovery –outlining the reasons for the work shortage, its expected duration, steps that will be taken to generate business to alleviate the challenge, and a description of measures that were taken to overcome the downturn in business before applying to the Work Sharing program. There also needs to be a reference to reduced hours, layoffs or other adjustments to the workforce that have taken place before this assistance was required, and a description of identified alternatives to a Work Sharing Agreement.
“It is very well communicated. They allow you to fax everything. They accept scanned documents,” Magill says, noting how she was also able to submit a single application for five separate operating companies. The application process was approved within weeks, participating employees had their Claimant Reports (Employment Insurance Cards) within days of the company’s approval, and Service Canada assigned her a specific contact person.
The ongoing paperwork merely includes a basic Utilization Report that lists the hours employees would usually have worked, the actual hours worked, and the number of hours that were covered by the Work Share program.
There are some restrictions, Gauthier stresses. Critical management positions such as a director of operations would not be eligible, and participating employees need to agree to the strategy.
The Canadian Trucking Human Resources Council (CTHRC) is an incorporated not-for-profit organization that helps attract, train and retain workers for Canada’s trucking industry. For more information, visit www.cthrc.com.
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