Managing the Workforce

This blog's previous post, "Management Approaches to Restructuring,' generated substantial number of comments regarding my use of the word "layoff" to describe Canada Post's planned 15% reduction in positions in Winnipeg. The original memo used the word "cut" to describe Canada Post's planned reduction in full time position and that word follows CUPW's labor agreement that guarantees jobs to full time employees.

A subsequent investigation into the labor agreements and data available from CUPW and the Postal Service provide some insight as to how Canada Post will achieve the reduction without layoffs.

Unionization and Labor Negotiation

Employees that work in processing plants and retail post office are unionized in Canada and the United States. All of these employees at Canada Post are represented by the Canadian Union of Postal Workers (CUPW). At the United States Postal Service, two unions represent workers performing similar jobs, the American Postal Workers Union (APWU) and the National Mailhandlers Union (NMHU).

Labor law in Canada allows postal employees to strike and CUPW employees have struck on numerous occasions prior to reaching contract agreements with Canada Post. Postal labor law in the U.S. does not have the right to strike and agreements are signed either following negotiation or the decision of an arbitrator.

Contact Provision and Management Flexibility

The following table provides a brief summary in contract provisions as they relate to the control over workforce size and composition. (Readers with greater knowledge of all three agreements are encouraged to make comments as to how the table ca be improved.) While the description below is limited, management at both Canada Post and the Postal Services both have restrictions on their control over hiring and firing employees. There is one important difference that is not included in the labor agreements. Canada Post employees do not have civil service protections that Postal service employees do.

	Postal Service – APWU & NMHU Agreements	Canada Post – CUPW Agreement
Guaranteed Jobs	Regular full and part time employees guaranteed job after 6 years	Regular full and part time employees guaranteed job after 5 years
Transfers	Involuntary transfers allowed within 100 miles of origin facility; longer transfers possible with compensation	Involuntary transfers allowed within 25 miles of origin facility
Full Time / Part Time / Casual/Transitional Employees ratio	APWU: Part time employees limited to 2.5% of employees within a district; casual employees limited to 6% of employees with a district; different limits apply to drivers NMHU: Full time employees must be 90% or more; casual employees limited to 12.5% of employees within a facility	Full time regular employee workhours must exceed 80% of total workhours after accounting for absences.

Employee Complement

Working within the confines of their labor agreements, the Postal Service and Canada Post use a different mix of full-time, part-time, and casual/temporary/transitional employees . The following table shows the proportion of straight time hours of clerks and mailhandlers in Fiscal year 2008 for both posts. The slight differences in the two contracts result in Canada Post having slightly less of its workhours paid to full time regular employees, more hours paid to part-time employees, and less hours paid to temporary employees.

	Canada Post	USPS
Straight Time Regular	76.9%	80.2%
Part-time Regular	16.5%	12.4%
Casual/Transitional/Temporary Regular	6.7%	7.4%
Total Regular Hours	100.0%	100.0%

The overall difference gives Canada Post slightly more flexibility in staffing its processing plants than the Postal Service. With a higher proportion of part-time employees, Canada Post may be able to deal with the changing nature of work with the decline of single-piece mail.

The difference in the mix of employees is most important in trying to cut staff without layoffs. Canada Post's full time employees tend to be both older and have many years with the corporation. Part-time workers are younger and have a significantly higher normal turnover rate than full time employees. Temporary employees have no employment guarantees.

Canada Post's could reduce its workhours by reducing temporary employees and allowing the turnover in part-time employees to provide work for full-time employees until normal attrition patterns within the Winnipeg plant and postal locations within 25 miles open up enough positions to bring the full time complement down 15%. Clearly this will take a couple of years but it is doable if the full time attrition rate is 4-5%. Canada Post's plans really depend on employees finding better opportunities elsewhere.

The employment guarantee and part-time maximum provisions of labor contracts of Canada Post and the United States Postal Service were both signed before the decline in single-piece mail changed the nature of managing workhours in mail processing plants. In all likelihood, reworking these long-standing provisions will come up in future labor negotiations as Canada Post and the United States Postal Service adjust its labor contracts to new market realities. It will be interesting to see how the differences in the negotiating processes in Canada and the United States result in changes in these provisions.