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Looking ahead at economic uncertainty and legislative changes around employment standards, 2018 will be a year of complexity at the bargaining table for both employers and unions, according to a new report by the Conference Board of Canada.

The report, which also draws from the organization’s latest compensation planning outlook survey, found that the top three negotiation issues for employers with unionized employees are wages, flexible working practices and productivity, with 63 per cent of respondents listing wages as their top negotiation issue and 33 per cent citing flexible work and productivity, respectively.

On the union side, 86 per cent of respondents said wages is the top issue in 2018, followed by employment security and health benefits at 53 and 38 per cent, respectively.

Read: Employers and employees disagree on right to request flexible working

The report notes that the focus on flexible working is likely due to the large percentage of millennials in the workforce, as well as older employees looking for part-time work as they transition into retirement and workers needing flexibility for child and elder care.

The report also noted that, while the Canadian economy rebounded in 2017, this pace of growth is likely to be unsustainable and this unpredictable global climate will keep pay increases modest into 2018. It found that the average negotiated raise for a unionized worker is projected to be 1.4 per cent this year, increasing to 2.4 per cent for non-unionized workers, according to the report. And three per cent of organizations are planning a base pay freeze this year across non-unionized employee groups.

Read: Compensation issues evolving as salaries projected to rise 2.5%

Among the legislative changes coming in across the country, the incoming legalization of recreational marijuana, along with concerns about its medical use, will add to the challenges around the bargaining table, according to the report. And mental health will continue to be a significant area of focus for both employers and unions.

“Despite stellar economic growth and record-breaking employment numbers in 2017, a slower Canadian economy and lingering uncertainties in the global economic climate will create a challenging bargaining environment this year,” said Allison Cowan, director of total rewards and labour relations research at the Conference Board of Canada, in a news release.

“Legislative changes surrounding employment and labour standards, minimum wage increases and the legalization of recreational cannabis bring a number of additional complexities to the bargaining table.”

Read: Sounding Board: Ontario’s Bill 148 adds administrative burdens, costs for employers

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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