Work for shares - show your love
Now here is a novell idea if your business is trouble:
Get your workers to work overtime and pay them with stock instead of cash. That's what Richtree restaurants has in mind according to this Toronto Star article. Richtree (which operates Movenpick restaurants) has proposed that its workers put in an additional 4.5 hours every second week and take payment in shares as opposed to money (i.e., the stuff you can pay your bills with). Workers will also sport buttons proclaiming their love for the company.
According to a company spokesperson, "...unions, which represent workers at the outlets, are co-operating with the plan but it still needs their approval. The move requires amendments to labour contracts."
HERE is one of the unions involved and apparently could not be reached for comment.
I'm not sure if this scheme violates Employment Standards legislation which, last time I looked, seems to imply that you need to be paid with cold hard cash for work performed, or why workers would want shares in a financially troubled business - instead of wages for time worked. I'm also very curious as to whether HERE and whatever other unions are involved are going to support this.
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1006816227073&call_page=TS_News&call_pageid=968332188492&call_pagepath=News/News
[ 11-28-2001: Message edited by: remote viewer ]
On the surface it looks like a fair request! You know trying to save a drowning business.
Everyone working together, everybody sharing the burden!
But when you cut to the chase, first of all, it is a 'DROWNING BUSINESS'.
Are the shares gonna be worth anything in six months?
Secondly, having employees work for NO cash just doesn't seem to add up to a rescue of the
magnitude needed to save a drowning business.
The big kahunas taking a %30 cut sounds .. well valiant!
That is until you do the math. Taking %30 away from say .. a few hundred thousand $$$,
doesn't bring the same tear to my eye as would the appr.%10 cut they are asking their
employees to take. (Not to mention the lost family time.)
It just doesn't add up to a good thing!!
[ 11-28-2001: Message edited by: siggy ]
I'm going to move this thread into the news & discussion forum.
EDIT: Moved.
[ 11-28-2001: Message edited by: slek ]
Richtree's annual report for 2000 paints a much more optimistic picture of its financial position and future prospects. I always put a lot of weight on these reports because this is an official document that the company publishes for the benefit of its shareholders and potential investors (and those guys don't like to be misled!)
http://www3.stockgroup.com/moo/annual2000notes.pdf
Here's something from the annual report that you may find interesting. It seems that this business has managed to swing some kind of merit pay scheme that must have received the blessing of its union(s).
If you read further down, you'll notice this scheme was discussed at a "union partners" conference (isn't that sweet?) and will soon be available on CD-ROM. We'll have to keep an ear to the ground for the CD. Maybe we can make it a hit!
"In many of our market restaurants as well, we have in place a service charge program designed to motivate employees by linking high performance with high reward. Staff members are regularly evaluated and, in the process, are awarded service charge points based on their training progress, willingness and ability to assume additional responsibilities, success in dealing with
customers, time in service, etc. These points provide the individual employee with additional compensation over and above his or her base wage and thus serve as an incentive tool.
This innovative compensation system was the subject of a presentation at a two-day conference on Union-Management Partnerships sponsored by Federated Press, a business publisher headquartered in Montreal. The presentation was entitled, The Incentive Approach at Richtree Marché: Breaking New Ground in the Pay-for-Performance Arena. It is scheduled for publication in CD ROM and book form by the spring of 2001, along with other conference proceedings. The
Company is particularly gratified that certain of its innovations are worthy of special attention."
The doofus's who came up with the hare-brained scheme ought to check out Section 7 and Section 23 of the Ontario Employment Standards Act. These sections suggest rather pointedly that where you permit an employee to work, you must pay them, at least minimum wage, in cash or by cheque, on the regular pay day established by the employer. I don't see any reference to creative stock option schemes.
Where are the unions that represent these workers? Maybe they should take time out from the conference circuit and bone up on the very bare minimums that the law provides to workers.
$11 per hour x 30 hours per week = $330 per week.
30 hours per week + 4.5 hours "Richtree Tuesdays" = 34.5 hours per week.
$330 per week / 34.5 hours = $9.57 per hour.
Ontario minimum wage = $6.85 per hour.
$9.57 > $6.85.
Is this arrangement legal? Yes. Is it moral? That depends on whether you think a union ought to allow a potential 13% wage cut in the middle of a collective agreement.
quote:
If the plan proceeds, the trust would buy Richtree shares at 65 cents each next year for employees, according to West.
The company's stock is currently trading at 60 cents per share. It has ranged between 54 cents and a $1 in the last three months.
If the stock returns to its three month high, the workers will end up receiving their full pay for all hours worked, plus an additional forty bucks each. ($1.00-$0.65 = $0.35. $0.35 * 108 extra hours over six months = $37.80) However, if the stock dives back to $0.54, they lose $12 each, the equivalent of one unpaid hour of work over the six month period.
Of course, if the stock goes down further, the workers lose more. But if the company goes out of business, the workers lose their jobs (and they probably wind up missing a few paycheques anyways). So, decide for yourselves whether this sounds like a good deal.
It is not the math that I worry about. It is the precedent that would be set by such an arrangement.
Not being paid cash money for hours worked undermines
the Labour Movement in a big way.
Right after Richtree gets the deal ..who wants it next? Then that $12 you so nonchalantly referred
to becomes millions off the back of the Power Source
all in the name of Big Business.
If we make deals like that I see no need for a union. I can arrange with my employer to work for
free anytime I like.
[ 12-04-2001: Message edited by: siggy ]
[ 12-04-2001: Message edited by: siggy ]
I still don't see how you can get around the ESA Section 7 provisions which require that wages be paid by cash or cheque (I believe direct deposit is now OK), on the regular pay day established by the employer. I don't see anything in the Act about a-lick-and-a-promise depending on the vagaries of the stock market.
There is also this, from Carswell's Employment Standards Guide (an interpretation guide based on the Ministry of Labour's own policies).
6.1.2
"The minimum wage establishes a "floor wage" to prevent employers from takign unfair advantage of workers with little or no bargaining power."
6.1.4
"The minimum wage is an emloyment standard; as such...its potection connot be lost by waiver or contracting out. In addition, the minimum wage is deemed to be a minimum over which a greater right or benefit prevails. Where a contract of employment provides for greater remuneration than the minimum wage, that remuneration must be asessed and enforced by an employment standards officer."
I would most certainly argue that the employer is not in any position to reduce these workers wages back to the minimum having entered into a contract that pays them more.
The optimistic presumption that one day, if all goes well, the workers will get something that would take them beyond minimum wage doesn't give them the right to ignore the ESA requirements to pay wages for work performed.
I would certainly hope that the union(s) involved in any collective agreement amendments that would be required to make this happen, intend on putting this to the members for ratification with a realistic explanation as to what this will get them.
In my view, this employer is trying to do what thousands have done successfully over the past two or three decades: roll back collective bargaining gains to legally required minimum standards levels (if that) by crying poor. If their business is in trouble, it's management's job to find the fix and the fix shouldn't be wage rollbacks.
If the business goes bust and the workers lose their jobs, they'll be out their jobs AND the pay to which they were entitled.
Workers who feel they're being railroaded into accepting this deal: Consider calling the local media. The Star has already run a piece on this - I'm sure they'd be interested in finding out more.
I wonder what would happen if a fella was to phone in sick on Richtree Thursday?
Now let's say that Richtree offers to pay me $330 for my first hour provided I work another 33.5 hours for free. I know, if you divide the $330 over the 34.5 hours, I'd still get more than minimum wage, but that's not what Richtree is telling me. They said I'd get $330 for one hour but that I'd have to work 33.5 hours for free. Wouldn't that be fraud if what they were really doing was paying me $9.57 for my first hour rather than the promised $330?
And I know, even though Ontario has an extremely left-leaning socialist loving government, I'd be amazed if the Tories would allow any one to work for free or for the promise of a stock payout.
Hey, why not pay everone with lottery tickets? Y'know, I think a real union would have been more than available to comment to the media on Richtree's plan.
Me thinks it was a done deal until an employee blew the whistle.
All are good points. I was just trying to point out that what Richtree was trying to do was (1) not illegal, but probably required an amendment to the collective agreement and (2) not necessarily all bad for the workers, although siggy is right, it probably sets a bad precedent. How can the union really know if a company is going broke? Maybe Richtree will open the books?
