What happens to workplace benefits during strike action?

In an ongoing effort to keep up with rising costs of living and inflation, along with maintaining excellent workplace benefits, employees are increasingly taking to picket lines to send a clear message to their employers. However, when labour disputes arise, the impact on workers' benefits and pensions can be a significant concern. Fred Hahn, president of the Canadian Union of Public Employees (CUPE), the largest public sector union in Ontario and Canada, explains how unions like CUPE, manage these critical issues during strikes and lockouts.

"Everything under the sun happens," Hahn says, explaining the varied approaches unions must take to protect their members' benefits. While he highlighted every union is different in terms of how they manage strikes and benefits, in CUPE's case, the union has established a designated strike fund. This proactive approach ensures that members' health and welfare benefits, which are often critical lifelines, are sustained even when the legal obligation for employers to maintain these benefits lapses during strikes.

CUPE’s strike fund is funded out of a portion of every CUPE member’s union dues, which are set at a minimum .85 per cent of their salary. The strike fund currently sits around $130 million and CUPE draws on this fund to pay the full cost of members’ benefits if employers refuse to continue coverage. The rest of members’ dues are allocated to the union’s day-to-day operations and to a defense fund that helps the union with campaign and political action work.

Despite this, Hahn is quick to point out that the relationship between unions and employers during strikes has been strained more recently as employers will decline to cover employees’ benefits during strike action. “We try to ask for and encourage the employer to maintain their share of the contribution of benefits. Sadly, most employers decline to do that,” Hahn said, noting particularly those within the public sector.

“Second to that, we’ll say, ‘Okay, we’ll pay the full cost. The employer portion, the employee portion, in order to allow those benefits to continue. In most cases, employers will agree. They'll submit the bill, and we pay it.”

There are situations where employers not only pay for the benefits plan, but they continue the administration of the health and welfare benefits, Hahn says. Sometimes, employers contract with a benefits carrier to do more than the administration of the plan, where the employer has benefits administrator positions. “Often those positions are bargaining unit positions. The challenge for some employers is that benefit administrators, should there be a strike or lockout, wouldn't be at work,” noted Hahn.

“This is not a question of whether or not there's funding set aside for this, there's always funding set aside to pay for benefits. There are employers of late who have said, ‘No, even if you're willing to pay the full cost, we will not continue benefits.’ While it’s not a common occurrence and while it never used to happen, it has been happening lately,” Hahn added.

Essentially, as Hahn suggests, there are no changes to benefits plans when employees go on strike as unions will ask both the employers and benefits carrier to continue the benefits and provide access to employees who need them in critical times, or in CUPE’s case, cover the costs themselves.

Pensions, however, present a separate challenge altogether, Hahn noted, as contributions from both employers and employees typically cease during a strike or lockout. “Often in return-to-work agreements, we bargain for the employer to pay their share of the pension, for the term of the strike, to the pension plan so the service will come back. It's rare to have employers agree to that but we try,” he said.

The union has also worked to extend timeframes for workers to make these buybacks, ensuring their retirement security is not jeopardized. However, “it's different rules everywhere,” Hahn says. “There is zero consistency here. It is left up to the good graces of employers and the ability and the strength of unions to bargain provisions that safeguard workers. It would be far better if there was some standardization that made sense for everyone.”

Health benefits negotiated in workplaces are incredibly important, Hahn asserts, claiming the union has had several situations where there has been a strike about obtaining a pension plan. “Tens of thousands of CUPE members don't have access to a workplace pension plan. We've had strikes that have occurred simply so that workers can try to get a modicum of retirement security, or benefits, particularly for mental health issues that are arising in workplaces,” Hahn says.

Adding there’s a well-documented staffing crisis happening in the Canadian healthcare system, which can lead to stress in the workplace, Hahn asserts governments at all levels need to understand that mental health supports are part of a healthcare system, “and should be covered universally. We shouldn't be paying benefit carriers to provide money to individuals. It should be covered publicly and administered publicly so that everyone has access.”

“There are far too many workers that don't enjoy the benefit of having a union negotiate for them. They're left to the devices of what's available in public benefit plans and those public programs continue to shrink. It’s the wrong direction for all of us,” said Hahn.