More than 330 e-commerce warehouse workers at HBC Logistics (The Bay) are on strike with the union saying negotiations broke down suddenly after the company refused to offer an increase in compensation for the past year, when workers continued to provide services without a contract during the pandemic.
“These workers stepped up to help The Bay cope with a surge in online shopping during COVID-19, even postponing bargaining when their collective agreement expired in May, 2021,” said Unifor Ontario Regional Director Naureen Rizvi, in a statement. “Now it appears Canada’s flagship retailer is cynically exploiting the goodwill of its employees to cheat workers out of the pay increase they should and would have received.”
“This is a company that received assistance from taxpayers by accessing the Canada Emergency Wage Subsidy (CEWS) during COVID but is now choosing to take advantage of the people who actually worked through the pandemic,” said Dwayne Gunness, Vice-President of Unifor Local 40.
The warehouse workers process online orders from across the country at the HBC Logistics location in Scarborough, Ontario.
The union said HBC Logistics has only offered pay increases on a go-forward basis only, refusing to acknowledge the retroactive period worked since May 2021.
Unifor is Canada’s largest union in the private sector and represents 315,000 workers in every major area of the economy.
“The Bay is committed to the collective bargaining process and hopes to continue its discussions in good faith,” shared a spokesperson for The Bay. “We have made fair, reasonable and competitive offers which included meaningful wage increases for associates. While we are disappointed the Union has taken this action, we are hopeful that a resolution can be reached quickly. In the meantime, there is absolutely no disruption expected to customer orders.
“The Bay appreciates the hard work of its associates, particularly those who worked through the height of the pandemic when a wage premium was provided. Accordingly, the company has now offered meaningful wage increases far in excess of what associates at the Scarborough Logistics Centre have received in the past. The union’s characterization of the bargaining process and the time leading up to it is simply inaccurate.”
“Having sat on the side of business in union negotiations we don’t know the full financial story of the Bay, not anymore as they are no longer a publicly traded company,” said George Minakakis, CEO, Inception Retail Group, and author of The New Bricks & Mortar: Future Proofing Retail. “I have always questioned their ability as a brand to remain relevant in the midst of a great deal of competitors globally. However, employee relations with a brand should go beyond unions and be focused on customers.
“Both the union and The Bay need to sit down and have an earnest discussion about the future of retail and what increases in wages mean to the longevity of the brand and the impact on consumers. In addition I have learned over the years that union activity for pay or even unionizing retail like it’s happening at Starbucks and recently at an Apple store in Baltimore, these are signs of employee relations not being effective. No pay will resolve this issue. Besides, The Bay is not Amazon and the business economics are different.
“Employees deserve to be paid a fair wage but if it is to the detriment of a business everyone loses. Finally, we are entering a period of economic uncertainty. Everyone on all sides needs to be mindful of the future.”
Following the split of HBC between stores and e-commerce, this action would appear to impact online services provided by The Bay, said Gary Newbury, a retail supply chain and last mile expert and Rethink Retail’s Top 100 Retail Influencer in 2021 & 2022 | CITT’s Innovator Award 2020.
“Fortunately for the disaggregated group, my understanding is many online sales are still fielded by local stores so there is a (costly) workaround for the retailer to mitigate such action to cover sales from the Scarborough fulfillment centre,” he said.
“As we know HBC’s only revenue during the provincial lockdowns was via online operations, and it appears HBC relied on the goodwill of staff to extend working practices beyond the expired collective agreement. I am not aware of any “hero pay” that was paid to these specific workers, which may have rubbed salt into the wound if there had been.
“Nonetheless, increasing discontent with treatment of essential workers (warehouse, transportation and stores staff) post pandemic, as we “return to normal” will likely see increasing localized action. As we continue to see record levels of employment and open jobs, HBC needs to think clearly about how to handle this situation, as there remain plenty of open vacancies for good paying warehouse roles across the GTA.”
David Ian Gray, of Vancouver-based Canadian retail advisory DIG360 Consulting Ltd., said: “It no doubt would like to sell its products to this same group and other workers. It’s a bad look for The Bay, particularly with the optic of taxpayer funded wage subsidies.
“It also is in a competitive hunt for workers across both Divisions.
“Broadly speaking, one wonders if COVID days of higher pay for warehouse workers is about to recede in favour of store associate wages.”