31% of Canadian workers are represented by unions. In Manitoba, 36% of the workforce is union represented. Unions strive to improve wages, benefits, terms and conditions of employment as well as advocating for social and political change. Employers and unions negotiate binding collective agreements of lengths that typically vary from one to three years. These agreements establish the overall terms and conditions of employment. Health, medical, disability, life and retirement benefits are important and expensive components of most collective agreements.
Comprehensive benefits programs including health, medical, life, disability and retirement plans can cost as much as 15% to 20% or more of payroll. For a number of reasons, the costs of maintaining these benefits are increasing at a high rate. Some believe the long term costs of these benefits are unsustainable.
The following are four important emerging trends and troubles that will have to be addressed by employers and unions through collective bargaining in the years ahead.
Retirement Benefits –Everyone agrees that retirement income is essential. Not surprisingly, there is major disagreement on the specific retirement programs that are best to provide workers with retirement income. Defined Benefit pension plans, although once popular, are proving to be unsustainable for many employers but are highly preferred by employees
Flexibility– Workplaces include employees of different ages and life stages. The benefits needs of employees vary greatly and one size fits all benefits solutions do not serve the needs of today’s workforce. Flexibility in benefits coverage, hours of work and location of work continue to be hot topics in workplaces of all kinds.
Alternate Care – The rapid emergence and popularity of alternate treatment and health care is creating a demand that these be included in benefits plans. Although increasing in popularity, benefits plans have not always kept up with the changing attitudes toward alternative therapies.
Who Pays– Premiums and the costs of benefits range from fully employer paid to employee cost shared. As benefits costs increase, there will be continued debate on cost sharing arrangements and the role of the employer and employee in maintaining employee health.
Addressing these issues in collective bargaining will not be easy. Unions will face increasing pressure for changes from members with varying and diverse benefits needs. Employers will face pressures to control costs and remain competitive while balancing union and employee demands for improved benefits coverage.
Mike A. Cuma is Vice President Human Resources and Labour Relations with Pinnacle. You can email Mike at email@example.com. These are the views of the author and not necessarily that of AQ Group Solutions.