2013 HR Trends for Canadian Employers
While it is hard to predict with certainty what will happen in Canadian workplaces during 2013, McCarthy Tétrault attorneys discern a few trends that are likely to influence employers during the upcoming year.
Downward Pressure on Wages
Given the current state of the economy and the uncertainty surrounding global finances, it is expected that there will be a continued downward pressure on wages, salaries and benefits in Canada during 2013. This is consistent with what we are seeing at the end of 2012 and the likelihood of large compensation increases appears unlikely.
Many Canadian employers went through the economic downturn in late 2008 and early 2009 by engaging in selective workforce reductions. The problem employee or the less-productive worker was often laid off, but generally speaking, there were few large scale plant closures or reductions. It remains to be seen whether a similar approach will be used by employers in 2013.
For the last several years, many Canadian workplaces have adopted approaches to minimize head counts. It is less than certain whether future cuts in payroll and benefits can occur without triggering a larger reduction in the workforce.
We expect that employment standard complaints and human rights complaints will increase if the economy remains flat. Our experience has been that employees who are asked to leave the workplace (even in situations involving a "reduction-in-force") often file complaints with government regulatory agencies asserting that there are ulterior motives for the termination.
Consequently, in weak economic times these agencies see an increase in complaints, and we correspondingly deal with responding to more complaints. In Canada, employment standards and human rights matters are complaints that occur most frequently, especially considering that these forums are far less costly to employees than going before the courts.
Less Union Activity
In weaker economies, there are three typical union reactions – all of which we anticipate in 2013. Organization activity usually decreases. Canadian unionization rates are low, and in a poor economy we do not generally see aggressive or significantly increased organizational activity. Most workers want to remain employed and not deal with any uncertainties associated with joining the union or encouraging collective bargaining.
Typically, labor disputes go down during a soft economy. Most unionized workers are somewhat fearful of a labor dispute resulting in the permanent closure of their workplace. Union demands for wage increases and other changes to collective agreements tend to be moderated as well.
According to our experience, grievances increase. Unions take a strong stance to adhering to the black letter law of the collective agreement and are not prepared to turn a blind eye on issues they view as important, like privacy issues. In particular, layoff and seniority provisions in collective agreements must be strictly adhered to.
Privacy has become a more important issue in Canadian workplaces, as you have read previously in "Cross Border." In those jurisdictions where there is privacy legislation, we anticipate a general increase simply because complaints are rising each and every year. In a downturned economy, a disgruntled employee is more likely to find other ways to complain about workplace issues, including using the Privacy Commission as an outlet for their unhappiness.
We will see what actually unfolds as the year progresses and we will keep you posted in future additions of "Cross Border."