Recently, city council approved a new collective agreement with Canadian Union of Public Employees (CUPE) Local 500. Representing 4,600 workers, CUPE Local 500 is the city’s largest union and the new agreement runs until the end of February 2021. The agreement calls for wage increases of 1.5% over the first three years, with a freeze in the final year.
Time will tell, but a cumulative 4.5% increase over four years will most likely be below the inflation rate – which can put workers in a tough spot. Recent provincial legislation tied Manitoba’s minimum wage increases to the inflation rate going forward, a sensible measure ensuring workers maintain their purchasing power.
The ‘elephant in the room’, however, is council’s decision to join past Councils in maintaining the no layoff provision.
Flexibility is key when an employer, such as the City of Winnipeg, faces difficult times. Without being able to adjust and align human resources to evolving circumstances, our city leaders are putting themselves in a tougher spot. Unlike the provincial and federal governments, the City of Winnipeg is required by law to balance the budget every year. The City can’t run deficits by law, magnifying the importance of their spending decisions.
A past example is instructive. In March 2015, the city eliminated the park patrol program to save an estimated $851,000 annually. Due to the no-layoff provisions, the city had to redeploy all affected employees to other city units. Some retired and others were redeployed successfully... but not all. Some continued to be employed by the city in "work of an undefined nature" until a redeployment opportunity materialized. The collective agreement handcuffed our city then, promoting inefficiency. It will continue to do so.
The past four city budgets have targeted just under $18 million in vacancy management savings (on average). With forecasted deficits of around $100 million for the next two years, we expect more vacancies will be maintained. They’ll have to be if the city is forced to balance the budget in the face of an inflexible collective agreement.
This agreement also has the potential to curtail innovation. Suppose the city wants create a new program or department. Any new positions created become permanent, regardless of the success of the venture. If you are forced to incur a permanent fixed labour costs with each new program, it raises the stakes of innovation in an already risk averse culture.
A better deal would have been one that allows employee wages to keep up with inflation, while giving the city the ability to manage itself more effectively through eliminating the no layoff handcuffs.
Unfortunately what was needed for ratepayers, city employees and citizens was lost to “labour peace” a year and a half out from the next civic election. With this agreement due to expire a year and half before another municipal election, we’re unsure this will be the last time Winnipeg accepts the status quo.