The issue of benefits changes at some Tim Hortons outlets in response to Ontario’s boost to the minimum wage to $14 per hour is a complex one.
On the one hand, the level of outrage at a decision by some Tim Hortons locations to cut employee benefits wasn’t a surprise. The move by two locations in Cobourg, Ont., to increase employee contributions to their benefits affected the lowest-paid workers and significantly counteracted the pay raise they received when Ontario boosted the minimum wage to $14 an hour, ahead of a planned further increase to an hourly rate of $15 next year.
Ontario Premier Kathleen Wynne led the charge against the franchise owners’ actions, which also included eliminating paid breaks. She accused one of the owners of bullying and suggested he should take up his concerns about Ontario’s minimum wage policy with her, instead of making his workers suffer.
In making her comments, Wynne was arguably acting in the political realm. The franchise owners, on the face of it, were acting in the business realm. Their actions were arguably a business decision in reaction to a significant increase in costs due to a fairly rapid rise in the minimum wage. From that point of view, it was a bit much for Wynne to level accusations of bullying and to suggest the employer was punishing its workers instead of taking up the issue with her.
But as with many things, the situation isn’t that simple. In a letter to employees outlining the changes, the employer did refer to the government’s role in the issue. It also faulted Tim Hortons’ head office for not helping franchisees cope with the cost increases. The blame-filled comments come as a number of franchisees have been in a dispute with Tim Hortons’ corporate owners over a number of issues, including costs imposed on them and price increases. So arguably, franchise owners find themselves in a difficult situation as the new minimum wage significantly boosts their wage bills while they’re unable to take action on their own to do one of the things many people suggest they should do in response: raise prices in their stores. So while the company’s head office has attempted to blame franchise owners for the public relations mess that erupted at the beginning of the year, it’s clear that it, too, has a role to play.
Further complicating the issue is the fact that the owners of the Cobourg franchises in question, Jeri-Lyn Horton-Joyce and Ron Joyce Jr., are the children of the founders of Tim Hortons. One of those founders, Ron Joyce, is one of Canada’s richest people. The optics, then, were quite bad and, with Ontario having actually provided tax relief to small businesses as part of efforts to help them offset the minimum wage increase, the Cobourg franchise owners weren’t exactly the victims people were likely to identify and empathize with.
So who’s right on the issue? Probably no one, really. Ontario’s increases to the minimum wage are happening unusually fast and businesses have very legitimate concerns, but recent events have signalled that, particularly in light of the high cost of living, much of society sympathizes with those who earn the least. Many people, in fact, have shown themselves to be quite willing to pay more to help support rising minimum wages. Some people, rightly or wrongly, will also argue businesses, including Tim Hortons franchises, have options to handle the wage increase without offsetting cutbacks to benefits.
Some businesses, of course, will be able to handle the increased labour costs better than others, but with other provinces planning to follow Ontario’s lead in boosting the minimum wage to at least some degree, they’ll want to tread carefully in how they react given the current environment. It’s at least reasonable for them to wait to see what the impact is and what their alternatives are before they take actions that affect their employees, even if they’re not being bullies when they do act.
Glenn Kauth is the editor of Benefits Canada.
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