Multiple Tim Hortons Franchises Serve Hot Cup of Controversy
In response to the increase of Ontario’s minimum wage to $14.00 an hour (one of the many changes introduced on January 1, 2018 by Bill 148), the franchisee owners of Tim Hortons in Cobourg, Ontario have taken controversial cost-cutting measures.
Employees at the restaurants, owned by the children of the coffee shop chain’s founder, have been told to sign a new document that outlines numerous changes that will significantly alter the terms of employment.
These changes include the elimination of paid breaks, as well as a drastic reduction in coverage for benefits. Employees with more than 5 years of service will need to pay 50 per cent of the cost of benefits, while employees with less than 5 years but more than 6 months of service will need to pay 75 per cent. Previously, employees with over 5 years of service were covered 100 per cent.
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Other casualties include incentives for employees who worked on their birthday, and workers who avoided taking a sick day during a six month period.
“Breaks will no longer be paid. A 9 hour shift will be paid for 8 hours and 20 minutes,” the document, obtained by The CBC and other news outlets, reads.
“These changes are due to the increase of wages to $14.00 minimum wage on January 1, 2018, then $15.00 per hour on January 1, 2019, as well as the lack of assistance and financial help from our Head Office and from the Government.”
Other Tim Hortons locations in Ontario, including six restaurants in Durham Region owned by the same family, have taken similar steps.
Can Tim Hortons Owners Legally Do That?
Under Ontario’s Employment Standards Act (ESA), employers are not required to give non-union employees coffee breaks or any other break besides eating periods.
Meal breaks are unpaid events, unless otherwise specified by an employee’s employment contract.
Lior Samfiru, Co-founding Partner at Samfiru Tumarkin LLP, joined Global News Radio 640 Toronto’s Kelly Cutrara to explain the legalities surrounding the Cobourg Tim Hortons’ decision, and the options that employees are now presented with. Listen to the interview below.
Employees Have Two Choices To Make
While employers are not required by law to provide employees with paid breaks, they are prohibited from eliminating those breaks if they were previously part of an employee’s terms of employment.
It is also not possible to force employees to pay for benefits previously provided by the employer.
Now, just because an employer is not allowed to make those changes to current employees’ conditions of employment, it does not mean that an employer can necessarily be stopped from making those specific changes.
That being said, affected employees can make one of two choices in this situation:
- Accept the Change and Continue Working Under New Conditions
An employee may decide that the changes to their terms of employment do not have a negative impact on their working conditions. Perhaps they feel that there are no better alternatives to their current employer.
IMPORTANT NOTE: Agreeing to the new changes without taking action gives your employer the green light to make changes to your job in the future, as you have set a precedent. You lose your ability to argue in favour of a Constructive Dismissal, a term that will be explored below.
- Pursue Constructive Dismissal
If the affected employee decides to reject the businesses new rules, they can treat their employment as being terminated by what is called a constructive dismissal. A constructive dismissal allows somebody to view significant changes as a termination, resulting in severance pay (also known as termination pay).
IMPORTANT NOTE: Just because a Tim Hortons employee affected by the aforementioned changes is making minimum wage, it does not mean that they aren’t entitled to a generous severance package. For example, an employee earning minimum wage, with 10 years of service, could still be owed 7 – 8 months’ severance pay. Consult our Severance Pay Calculator to determine what you would be owed.
Lessons for Employees
Consider how changes to the terms of your employment impact you. Do changes, like the ones that have been announced at the Cobourg Tim Hortons, impact compensation, job duties or both? It is much easier to object to significant changes to compensation.
Review history of changes to your job. Consider whether there have been changes made in the past, or if this is the first one. If you did not object to a past change, you may be deemed to have accepted further changes.
When you should talk to Samfiru Tumarkin LLP. Where a change is significant or results in embarrassment, consider obtaining legal advice to determine whether you are entitled to compensation from your employer.
Lessons for Employers
Talk to us first. Always seek legal advice before implementing changes in the workplace.
Consult your employees. Discuss any possible change with the workforce prior to implementation and seek a “buy in” before implementation.
Avoid creating a toxic work environment. Employers should keep in mind the impact that any changes to terms of employment will have on their employees and the workplace environment. If an employee feels that they are being forced to work in a “toxic” or “poisoned” work environment, make sure you actively address their concerns. Harassment, or loss of dignity in the workplace can attract a claim for constructive dismissal in which the employee is owed severance.
Lior Samfiru, Co-founding Partner at Samfiru Tumarkin LLP, spoke to Ontario Labour Minister Kevin Flynn in an exclusive interview on The Employment Hour about the impact that Bill 148 would have on businesses, especially where minimum wage is concerned. Listen to the interview below.