Inequities of Part-time Work in Canada

Holland’s bold employment reforms are an easy model for Canada to adopt. A generation ago, organized labour in Canada and Holland developed markedly different strategies to deal with the issue of part-time work. Holland’s approach has been the clear winner, with major benefits all across Dutch society. Part-time work presented labour unions in both countries with a dilemma. Many workers, particularly working moms, wanted flexible and reduced work times. But part-time work as it was then structured caused unions real concern: Exploitation: Many part-time workers received lower wages for the same work and a less-than-fair share of benefit and pension rights. Insecurity: Many part-timers had constantly-changing schedules or were subject to layoff without notice. In some workplaces, part-timers were not part of the bargaining unit and thus potential strike-breakers. One-sided Flexibility: Fixed-cost benefits and ceilings on payroll taxes meant that part-time workers cost employers more per hour, so when part-timers were not financially exploited, employers would restrict access to part-time to work situations where part-time served the employer’s needs rather than those of the employee. The response of the Canadian labour movement to the issue of part-time work could best be summed up in one word: ambivalence. Unions in Canada couldn’t seem to decide whether to fight against part-time work itself or to fight to free part-time status from exploitation and insecurity. Gender politics made for strange alliances. Some male-dominated unions actively discouraged part-time options for their members as a way to deter women from taking “men's jobs.” Some doctrinaire feminists in the labour movement argued that part-time options for women would create a “mommy track” in the workplace and that only by working full-time would women be taken seriously. The upshot is that organized labour in Canada was half-hearted in it's attempts to push for employment-standards protections for part-time workers. Canadian unions did not mount any effective challenge to a payroll and benefit structure that biased Canadian employers towards long work weeks. The result, twenty years on, is that part-time work in Canada is still often underpaid, insecure and at the beck and call of the employer. A payroll and benefit structure that encourages long work weeks has been left in force, causing a steady upward creep in average work hours for full-time workers. By contrast, in Holland, quality of life (and particularly quality of family life) became the major philosophical value driving the labour movement. Flexible and reduced work times were seen as an important tool for making the workplace friendly to the needs of working parents of both genders. Rather than fighting the growth of part-time work, Dutch labour activists threw the weight of organized labour behind winning fair treatment for part-timers. The results: Part-timers in Holland must be paid the same hourly rate of pay as full-time workers; part-timers must be given at least a pro-rated share of benefits, or cash in lieu; where there's a pension plan, part-timers must be allowed to join; where there’s a union, part-timers must belong. Several years ago, major unions in Holland began making the right to work less than full-time a right of employment. A supervisor who refused an employee’s request to work less than full-time had to justify that refusal to an external arbitrator. The right to work less than full-time has become an employment-standard right for all Dutch workers. A combination of employment-standard regulations and individual collective agreement provisions ensure that part-time workers have predictable schedules and full job security. Unions also put strong pressure on the Dutch government to re-structure payroll taxes and employee benefits. Ceilings on payroll taxes tend to make overtime cheaper and part-time work more expensive for employers. Funding medical and dental costs as fixed-cost, per-employee items has the same effect. The Dutch government was pushed to reverse this bias so that workers on shorter work weeks were cheaper for employers and overtime more expensive. The changes that have been made in Holland to promote and support part-time work have proven to be keystone changes with big impacts across the economy: Low Unemployment: The employment-spreading effect of having more than a third of the workforce part-time by choice has driven unemployment in the Netherlands below three per cent. Reduced Tax Burden: Low unemployment in turn has sharply reduced the tax burden associated with recession; big differences can be expected in how that slowdown will play out in Holland versus Canada. Gentler: Payroll and benefit costs that are based on total hours worked rather than warm bodies on the payroll reduce the employer’s incentive to lay people off during an economic slowdown. When there is no economic advantage, employers are much more interested in temporary reductions in hours than in laying people off. And while an unpaid day off each week creates a financial squeeze for workers, these privations are minor compared to the economic hardship and emotional devastation wrought by layoffs. Softer: Consider what happens in a climate of mass layoffs. Laid-off workers slash their expenditures drastically because they must. Survivors cut their expenditures almost as deeply, fearing they may go in the next round. Everyone stops buying; layoffs create more layoffs in a string of dominoes. Contrast this to what happens when everyone in a workplace takes a day off without pay, every other week. It's annoying rather than scary, so workers change their spending habits as little as possible. Demand softens only a little and the downward spiral is prevented. Shorter: What happens after a recession when the economy starts to recover? When employers have laid people off at the start of a recession, they're often reluctant to rehire until they’re really sure the recession is over. They work their remaining staff overtime instead. “Jobless growth” was what they called this sad little dance after our last recession. By contrast, when a country handles its slowdowns with shorter work weeks, as soon as demand picks up, employees begin returning to full work schedules. If the global economy does go into recession, Canada will likely see a repeat of 1991: A million or more Canadians will lose their jobs and it'll be several years before they're all hired back. In Holland, what's likely to happen is that several million people will cut back to four-day workweeks. When the economy starts to recover after a period of months, they'll return to full-time hours. That is, of course, unless Dutch workers flatly refuse to go back to a five-day workweek. Why aren’t similar changes happening in Canada? It's not because Canadians don't want to work less. In poll after poll, Canadians are saying they are stressed out and need more time off. One poll even suggests that most Canadian working women are so exhausted they'd prefer a good night of sleep over a good night of sex. And you don't need to tell Canadian employers that a tired and stressed-out workforce is less than productive, makes too many mistakes and is cranky with the customers. They see it every day. What needs to happen is that unions in Canada have to get off the fence about part-time work. We need to educate, advocate and negotiate for full employment rights for all part-time workers in this country. We can use Holland as a model and an example.We must also pressure the federal and provincial governments to overhaul Canada's antiquated payroll-tax and employee-benefits structure. Fixed-cost benefits and payroll taxes with ceilings are a dog-in-the-manger, making Canadian employers resistant to voluntary, individual reductions in work time. The extra payroll costs an employer has to pay when an employee drops back to part-time aren't as large as the savings an employer can expect through higher productivity. But the costs are visible and certain, while the productivity savings are hidden and theoretical in an employer's mind. The changes needed to reverse the onus of Canada's tax and benefit structure are relatively simple. First, restructure payroll deductions for Canada Pension Plan and employment insurance to make contribution rates zero on the first $8,000 of income per year. Remove the ceilings on contributory income at the same time. Taken together, the two changes are revenue-neutral, so EI and CPP benefits won't be affected. The other area needing reform is health-care benefits. As currently structured, medical and dental plans are a large and fixed cost for employers. When employees work overtime, the cost per hour of those benefits goes down. When the work week is shortened, costs per hour rise. How should it be changed? A first step would be for the federal government to work with the provinces to expand medicare to include dental-care coverage. Then, instead of funding medicare/denticare as a fixed fee item, it should be funded as a contributory program like El and CPP - with a zero contribution rate on the first $8,000 of income and a percentage rate contribution on all income thereafter. With these changes in place the perverse rewards of the current system would be reversed: employers who overwork their employees would bear the cost of the unemployment they create. Employers who spread the work around would share in the savings that result when welfare and El costs are reduced. There's no need for Canada to legislate a shorter work week. Just remove the obstacles that have prevented the three million Canadians who want to work less from doing so, and they'll cut Canada's unemployment rate in half while making the country more family-friendly. The 21st century was supposed to be a time of leisure and prosperity. In Holland it is becoming so. In Canada it still could happen if we learn from Holland's success.

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Inequities of Part-time Work in Canada

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