Unifor warns of ‘contract flipping’

Union accuses airport authority of suppressing wages
By Liz Foster
|Canadian Labour Reporter|Last Updated: 05/13/2015

Contract flipping — an employer practice of switching service providers every few years in an effort to suppress costs — forces employees to reapply for their jobs and, often, to start at the bottom of the wage scale, according to Unifor.

The union took a stand against the practice in March after the Greater Toronto Airport Authority (GTAA) opened a tendering process for its contract involving the assistance of passengers with special needs.

The contract was awarded to the Toronto Ground Airport Services (TGAS). But the TGAS has made no employment commitment to the 260 affected employees working under the contract’s previous provider, Swissport (formerly Servisair) at Pearson International Airport, according to Unifor.

"Some of the employees who were doing the work with Servisair have applied to take the job with the new company — again, starting at minimum wage — but our understanding is that not many of them have been hired," said Unifor national representative Leslie Dias.

"We had asked that they be able to be put to the front of the application process but, as can happen when jobs are available, there was a huge turnout and there were very long lineups. Our people had to get back to work. The current employer wouldn’t give them any time to apply so a lot of them missed the opportunity just as a result of the way the process was set up… They weren’t even given that basic courtesy. So it appears the vast majority of them are not going to get jobs with the TGAS."

Legislative requirements

In Ontario, private and public sector employers are bound by successorship rights legislation and required to maintain work standards negotiated by a union when businesses are transferred or sold. Ontario employers' sub-contracting services, however, are not bound by the same requirements. And federally regulated industries such as transport are not bound by successorship requirements because the Canada Labour Code contains no such provisions.

So while the GTAA’s decision to open a tendering process for the contract was legal, Unifor is calling the practice "unethical."

"Frankly, it shouldn’t be legal," Dias said. "Employees finally start to see some improvement (in their wages) and then they basically get the rug pulled out from under them and they have to start over. Not just at the bottom of the pay scale but even trying to get the job, period."

The contract for employees assisting passengers with special needs has been flipped every three years since 2004, according to the union. Unifor is calling on the GTAA to require that all contractors provide a minimum standard of pay when operating in the airport.

"We hope to achieve a minimum standard and really having some of this work be awarded based on the competitiveness of the services provided rather than on being able to grind each other into the ground based on the lowest price," Dias said.

GTAA improving services

The GTAA, however, said the quality of services provided and potential benefit for passengers was the reason it decided to open a tendering process.

"The point of issuing an RFP (request for proposal) is to make sure that you’ve got the best company doing the work that’s required at any given time," said Scott Armstrong, director of communications for the GTAA.

"We were hoping for, and we did get, a good response from a number of different companies that we then measured, comparing their prices and their service level standards, to see if they could meet the requirements of the job at hand."

An upswing in complaints led to the issuing of an RFP, Armstrong said.

"We run our contracts in a responsible way. We’re hopeful that the new arrangement the airlines have with the service provider will result in a better level of service for passengers."

This explanation didn’t fly with Dias, however. She said the primary reason the GTAA received complaints about service was because the contract itself, set up by the airport authority, limited the number of employees.

"You can’t make the employees themselves responsible for the lack of service when it was the airport authority that set up the contract that way," Dias said. "I think they’ve finally recognized there was a deficiency in the way they had the contract set up and so now it’s set up on a different ratio system and there will be an opportunity to have some more people assigned to do the work."

Unifor launched an informational picket on March 20, distributing flyers to passengers in the airport, and Dias said the union will continue to fight against contract flipping.

Legal issues

However, the demand for successorship rights is unlikely to get off the ground, according to Muneeza Sheikh, a partner at Levitt and Grosman in Toronto, who said precedent in this area is very clear.

"They’re saying ‘successorship,’ but I don’t think that argument is going to get them anywhere, especially looking at the recent cases in this area," she said.

"From a legal perspective, I don’t necessarily think the answer for Unifor lies in filing a successorship application before the board. I think it’s a lesson to them and when they’re involved in their next round of bargaining, what they could do is address the issue of sub-contracting in the collective agreement. That’s the appropriate way to deal with this."

Unifor could use bargaining as an opportunity to negotiate better protections within the collective agreement, create stronger seniority provisions or introduce stronger language about what qualifies as a sub-contractor, said Sheikh.

Another option is to introduce a provision that prevents sub-contracting altogether, she said.

"If this is something the union is really concerned about, it’s something they should be addressing in their rounds of collective bargaining," she said.

"If it’s that important, then negotiate better protections for your people."

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