Target fights union in Zellers take-over in Canada

By Marina Strauss, Globe and Mail, November 29, 2011
Target Corp. (TGT-N51.630.420.82%) is locked in a fight to prevent Zellers employees from maintaining their union status, as the discount giant pushes to keep its costs down for its foray into the competitive Canadian retail field.

Target’s blueprint for Canada entails converting about 135 Zellers stores to the Target name by 2013 after letting go all the Zellers employees and starting fresh with newly hired staff – and no union. Currently about 15 of the Zellers stores are unionized.
But now, in a test case, the union has applied to the B.C. Labour Relations Board to declare Target as the “successor employer” to Zellers at an outlet in Burnaby, B.C., and keep the employees unionized.

“It could be quite a battle,” said Richard Chaykowski, a professor at Queen’s University’s School of Policy Studies in Kingston. “Any decision a government board makes would potentially be only Round 1.”
Target and its discount archrival, Wal-Mart Stores Inc., have fought the United Food and Commercial Workers for years as the union attempts to organize the retailers’ employees and improve their pay and working conditions. So far, the retailers have managed to keep unions out in North America, although for brief periods the unions have succeeded in organizing some employees.
At stake is Target’s low-cost operating model, which relies on competitive compensation and flexibility in scheduling shifts and assigning tasks. A move to unionize workers could hurt that model. Target is taking on the even bigger Wal-Mart, the world’s largest retailer, which has generally been successful in its opposition to unions.

However, in Canada Target is now facing a well-entrenched principle in labour laws that calls for a successor company in a takeover to hold on to a union if the firm is operating in the same area.
“The whole purpose of successor rights protections are to prevent this sort of thing from happening,” said Steven Barrett, a lawyer with employee law specialist Sack Goldblatt Mitchell LLP.
Lisa Gibson, a spokeswoman for Target, said the firm believes its $1.8-billion acquisition of Zellers leases “is a real estate transaction and not the acquisition of a business, technology or employees. As such, we do not believe Target is a successor employer under applicable law and do not believe that there was reasonable cause to file a successorship application.”

Mr. Barrett said provincial successor rights provisions are designed to protect unionized employees in the case of a temporary shutdown because of an ownership change if the switch is in virtually the same area of operations. Other provinces also recognize the “fundamental” protection of successors rights, he said. “You can’t let those rights disappear simply because the business gets sold.”

Ivan Limpright, president of Local 1518 of the UFCW, which applied to the B.C. labour board earlier this month, said the union aims to ensure that Target honours its legal obligations and continues to employ its 120 Zellers members at Brentwood Mall in Burnaby. The successor dispute was touched off when the union recently sent Target a letter indicating its intention to negotiate a renewal of its existing contract, union spokesman Andy Neufeld said. "That’s when Target challenged our successorship."
Prof. Chaykowski said unions have faced an uphill battle in organizing retail workers, partly because they are highly transient and because the sector is so competitive, with razor-thin profit margins. Target feels tremendous pressure to remain union-free to help keep costs down, he said.
It will be for the courts to decide if Target is a successor employer, retaining both employees and their contract and their union membership. And, likely, if the lower courts decide one way, the issue will be joined at a higher level.
This is a battle that has been raging across the retail world in North America for years, led by WalMart.
Employees' rights, including the right to belong to a union are under attack, in all sectors of the economy, as fiscal crises face local, state or provincial and federal governments.
With unemployment being so high, and the resulting availability of non-union workers making it relatively easy to hire in the retail sector without having to meet union contract demands, management has been running roughshod over workers for too long.
While there are several abuses of their power that have legitimized the unions' emaciated public opinion, there is still a need for worker protection, for due process, for decent wages and benefits, and especially for fairness in their treatment by management.
Canada is not, and must not become, merely U.S. (North) with respect to the preservation of unions. However, unions themselves, just as they have done to remain viable in the auto sector, will have to make significant concessions to adjust to the global market conditions of nearly slave labour, when compared with third world workers.
Canadians, however, must press their governments at all levels, in favour of workers' rights, protections, due process and sustainable wages, as part of an overall "push-back" against management that is determined to gut the unions and destroy them totally. The unions to management are not as is Iran to the west. The unions are not radioactive; they are not determined to destroy management's right to manage; they are not interested in raping and pillaging management's rightful access to reasonable profit. They are, rather, a useful and potentially effective instrument to protect workers and this test case will write another chapter in either the meagre survival of the union that currently protects Zellers' employees or the continuing erosion of labour protection.
We all know how the Canadian government feels and acts towards unions when they are threatening to strike: the heaviest hammer available is slammed down on the unions in federal government legislation, even reducing the wage levels agreed to by management prior to the strike or lock-out.
However, the Canadian people still have many options open to them to speak out in support of the labour movement, and this Target "successor" question is one such option.
Can the Zellers' workers hear the sound of clicking keypads, phone calls, emails and text messages in support of their right to continue to work in the new Target stores, within their union contract with its several supporting provisions?