The Tim Hortons on Division Street has issued a letter to employees advising of a cutback in benefits that effectively reduces their wages. The move is blamed on the change in the minimum wage – most employees were getting $13 an hour but will now get $14. The franchise is owned by Ron Joyce Jr. and his wife Jeri-Lynn Horton-Joyce who are the son and daughter of the chain’s founders. The issue got into the National Press (see links below) and now Kathleen Wynn is blasting the owners calling them bullies and said: “if the owners want to challenge Ontario’s new minimum-wage policy, they should come directly to me and not take it out on workers”.
Employees have said that the benefits are why they like working at Tim’s and one was quoted as saying that the net effect to him is a reduction in pay.
The changes are that breaks will no longer be paid and employees will now have to contribute to some of their benefits. Each employee was given a letter outlining the changes and asked to sign it.
The letter includes the reasoning:
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 [my emphasis].
Tim Horton’s corporate response to CBC when they asked about the issue was:
“Almost all of our restaurants in Canada are independently owned and operated by small business Owners who are responsible for handling all employment matters, including all policies for benefits and wages, for their restaurants.”
“Restaurant Owners are expected to comply with all applicable laws and regulations within their jurisdiction.”
Tim Hortons corporate was bought in 2014 by the owners of Burger King but many franchise owners are unhappy with the new management. They formed the Great White North Franchisee Association (GWNFA) to band together. City News reported that a GWNFA spokeswoman “declined to comment on the letter and said the Joyce family would not be making a comment to media.” However, City News also reported that “the association’s board of directors released a statement Thursday saying Ontario’s Liberal government has put its members in a “difficult situation” by implementing the minimum wage increase.”
The GWNFA, whose membership hit half of all Canadian Tim Hortons franchisees last October, said its goal is to mitigate job losses.
But without help from their parent company in lowering food costs, raising prices and reducing couponing, the association said franchisees have been forced to take steps to protect their business.
“While other competitors have received concessions from their franchisors, unfortunately our chain has not,” the GWNFA said. “Many of our store owners are left no alternative but to implement cost-saving measures in order to survive.”
Employees were quoted as saying that the owners are currently in Florida.
Most of the media jumped on the bandwagon when Premier Wynn made her comments.
City News quoted her:
“I’d be happy if this man were making a statement about the government or about the policy,” she said. “What I think is really unfair, and where I think the bullying comes in, is that he’s taking this out on his employees. He’s behaving in a way that I think is so unfair to his employees, people who are trying to make ends meet.”
I’d suggest that given that all competing businesses have the same problem, actions coordinated by Tim Hortons corporate (like a small price increase) would go a long way to resolving this issue.
The letter to employees finishes with:
“Once the costs of the future are better known, we may bring back some or all of the benefits we have had to remove.”
- CBC – Tim Hortons heirs cut paid breaks and worker benefits after minimum wage hike, employees say
- MacLeans – Tim Hortons franchises owned by co-founders children cut benefits, paid breaks
- CTV News – Wynne on Tim Hortons founder’s son: “Act of a bully”
- City News – Wynne accuses Tim Hortons founders’ children of bullying employees
- Toronto Star – Premier accuses Tim Hortons’ founders’ children of bullying employees
Update Jan 5, 2018 – 2:30pm
A CTV video with the latest (Starts with a short commercial).
Update January 6, 2018
The following report from the Financial Post seems to be relevant to the discussion.
The Great White North Franchisee Association (GWNFA) says that McDonald’s, Cara Foods and Starbucks have all announced price increases to help offset additional costs, the association says. Parent Company Restaurant Brands International (RBI), meanwhile, is not allowing its franchisees to put through price increases, nor has the parent company offered reductions in food or paper costs to its franchisees.
Looks like the big issue is a fight between GWFNA and RBI. That’s why it’s Tim Hortons in the spotlight and not other businesses.