Arbitrator awards rural Canada Post carriers up to 25% raise in pay equity decision

Rural and suburban postal workers across the country celebrated Thursday after an arbitrator ordered Canada Post to pay them more — much more — as part of a long-awaited pay equity decision.

For a majority of the Crown agency’s mostly-female rural and suburban carriers, known as RSMCs, the ruling translates into a 25-per-cent pay hike, plus some increased benefits, said Canada Post spokesman Jon Hamilton. Not including benefits, the pay increase amounts to as much as $13,000 annually, retroactive to the beginning of 2016, said Canadian Union of Postal Workers representative Cathy Kennedy.

“We’re very happy with [the ruling],” said Kennedy, who was one of three members of the union’s pay equity committee.

Read: Canada Post and union agree to pay equity review

Arbitrator Maureen Flynn issued the ruling to Canada Post and CUPW after the two sides failed to reach an agreement through mediated talks by an Aug. 30 deadline. The union argued Canada Post’s 8,000 rural carriers — most of whom are women — were being paid substantially less than their majority-male urban co-workers. About 60 per cent of RSMCs are women.

The chair of Canada Post’s board of directors and interim president and CEO, Jessica McDonald, pledged to move quickly to implement the pay changes and called Flynn’s ruling “thoughtful and detailed.”

“This is an incredibly important ruling for our rural and suburban carriers,” McDonald said in a statement. “Pay equity is a basic human right and therefore pay disparity on the basis of gender is wholly unacceptable for Canada Post.”

In a preliminary 176-page decision issued in May, Flynn largely sided with the union over how Canada Post should calculate compensation rates for its rural workers, calling the corporation’s methodology “not reasonably accurate.”

Thursday’s ruling came as CUPW and the post office continued to negotiate new contracts under a Sept. 25 deadline for a strike or lockout, with the aid of a third party. Canada Post indicated late last month that settling the pay-equity dispute could cost the corporation upwards of one-quarter of a billion dollars when it posted a second quarter loss before taxes of $242 million. The figure was a dramatic drop from the $27 million profit the agency recorded during the same period in 2017.

Read: 82% of global employers planning to review pay equity, gender pay: survey

The corporation said the losses came despite a nearly 20 per cent increase in second quarter parcel revenues over the same three-month segment in the previous year. Canada Post said Thursday that a full accounting of the cost of the pay equity decision would be included in its third-quarter results.

The dispute was complicated by the fact that rural and suburban postal carriers have been paid under different remuneration structures, leaving exact hourly pay rates open to some interpretation.

The lowest-paid RSMCs earn a “derived hourly rate” of $19.73 per hour. Under Flynn’s ruling, that rate is increased to $25.95, retroactive to Jan. 1, 2016, said Kennedy. But that doesn’t include general wage increases awarded since 2016, she said.

Higher-paid rural and suburban carriers would see their paycheques match the higher hourly rate.

CUPW said it was disappointed in a portion of Flynn’s ruling that awarded the back-dating of post-retirement benefit increases to 2016. The union had asked that the benefits be calculated as far back as 2004.

The federal government announced in its 2018 budget that it would introduce pay equity legislation to ensure all federally-regulated workers who perform work of equal value receive equal pay.

Read: Editorial: We are woman: A call for gender diversity, pay equity and workplace mentorship 

The additional benefits include:

  • New vacation leave entitlements — This includes four weeks after seven years of service, five weeks after 14 years, six weeks after 21 years and seven weeks after 28 years.
  • Disability insurance — Retroactive to Jan. 1, 2016, route holders and permanent relief employees who suffer an injury or illness will be covered by the same disability insurance provisions as letter carriers.
  • Life insurance and death benefits — Route holders and permanent relief employees will be covered by life insurance and death benefits beginning Jan. 1, 2019. For the period from Jan. 1, 2016 and Dec. 31, 2018, the estate of members who passed away will receive equal share of the premiums Canada Post would have paid for insurance.
  • Health-care premiums in B.C. — Effective Jan. 1, 2019, active route holders and permanent relief employees in British Columbia will receive the same contributions to the B.C. health-care premium as urban employees. These staff will also receive retroactive payments for the period between Jan. 1, 2016 and Dec. 31, 2018.
  • Leaves — Effective Jan. 1, 2019, route holders and permanent relief employees will be eligible for marriage, birth, adoption, court, personal selection, examination and career development leaves on the same basis as urban employees. For the retroactive period, permanent relief employees and route holders will be provided an equal share of the retroactive value of these leaves.
  • Post-retirement health care: Effective Jan. 1, 2016, route holders and permanent relief employees are entitled to post-retirement health-care benefits. However, the arbitrator sided with Canada Post and ruled that the 15-year eligibility period begins Jan. 1, 2016. Route holders and permanent relief employees who have a minimum of two years of continuous service since Jan. 1, 2016 will be entitled to post-retirement benefits if they leave Canada Post employment on a medical retirement.

Read: Tips for workforce planning amid the changing landscape for leaves of absence