Contract flipping is not a widely publicized or known strategy in the employee and labour relations environment.
It is, nevertheless, a staffing scheme that exists and is used with more frequency than publicity.
Contract flipping is the practice of terminating existing unionized employees under one contract and then hiring the same employees for lesser wages and benefits under a new contract. This can be done if the business is sold from one entity to another and/or if there are no successor rights within the existing collective agreement.
While this is not an illegal or illegitimate action on the part of the employer, it is a practice that has little benefit for existing employees. When this happens, the economic impact on individuals can be devastating. On the employer side, however, contract flipping allows for significant savings and labour-related cost reductions.
In British Columbia, contract flipping has become an issue for resolution within the legislative framework. The current government in British Columbia has introduced legislation to limit the practice of contract flipping.
The first approach by the government of British Columbia was targeted in the public sector for seniors’ homes and health care facilities with the introduction of Bill 94.
Click here to read about the proposed changes to contract flipping through Bill 94.
The impact of the proposed legislation has moved into the private sector as well, as noted in a recent article about the impact of contract flipping on janitorial workers employed by BC Hydro.
Click here to read the article.
These articles provide us with the example of how the government becomes a key actor in changing the legislative environment. In this case, the actions of the provincial government in British Columbia come from the premise of social justice when dealing with the matter of contract flipping and its impact on its citizenry.
As of the timing of this post, the current status of Bill 94 is unclear. What is clear, in this case, is the need and the resulting actions of government intervention that are required in order to institute a change in public policy.
Discussion Questions:
- Is there a benefit to contract flipping for employees? Explain your rationale.
- What are the potential risks to employers who use contract flipping as part of their staffing protocols?
- As the HR professional for Alpine Building Maintenance, what advice will you give to the company’s decision makers about the timing of hiring former BC Hydro janitorial workers?
- In your opinion, why does the British Columbia government want to change the practice of contract flipping in the health-care (public services) sector?