Unilateral reduction of wages violates contract

Unable to compete on delivery runs, the company began reducing trip rates for drivers. Eventually, it brought the effective hourly rate below the collective agreement minimum. The arbitrator found the “clear and express” language needed to allow the company to set new rates on existing runs did not exist in the agreement
By Mark Rogers
|Canadian Labour Reporter|Last Updated: 11/28/2011

Under competitive pressure to reduce its rates, a trucking company recalculated the trip rate it charged customers based on a wage rate that was lower than what was specified in the collective agreement.

The union and the employer had a long-standing collective bargaining relationship. Hourly rates under the agreement between the parties ranged from $21.85 at the beginning of the agreement to $22.85 at the agreement’s end in 2012.

In addition to establishing the basic hourly wage rates, the collective agreement also provided for trip rates. Trip rates included standardized calculations for yard time, loading time, breaks and hook-up time. Trip rates were established to provide an all-inclusive, consistent rate to be applied to regular trips made to three main destinations. These regularly scheduled runs were referred to as bid runs. Drivers could bid on these runs based on their seniority and operate the run for a period of one year before the run was put up for bid again.