by Ashton Starr
Seventy workers at the Sheraton Ottawa Hotel are at risk of losing their jobs, with some already reporting their termination to their union representatives at the Hospitality & Service Trades Union (HSTU) Local 261. The news came to some workers as they received their final paychecks on the morning of March 17, 2021, one year since they were put on temporary leave.
The terminations include the unionized laundry, housekeeping, and catering staff, some of whom worked for Sheraton between 5 to 25 years. The company’s management cited a recall clause in the workers’ collective agreement, in which an employee can lose their seniority status or have their employment terminated if they have been temporarily laid off for 52 weeks.
When COVID-19 arrived in Ontario a year ago, hotels were deemed one of the essential businesses, according to lockdown regulations issued in March 2020 by the Ontario government. However, the Sheraton closed alongside non-essential businesses and temporarily laid off all union and non-union employees. It eventually re-opened in October with new COVID-19 guidelines and protocols, bringing some employees back to work.
Employees temporarily laid off during the pandemic were eligible for the Canadian Emergency Response Benefit, a $1000 per month taxable financial support, which lasted the entire time the Sheraton was closed. HSTU Local 261 stated that only 11 to 12 of its members (out of approximately 80) returned to work in October — as well as front desk employees, who are not in the union. By this time, the remaining 70 employees were receiving Employment Insurance.
The Leveller spoke to HSTU Local 261 representative Shane Chisholm, who said that the management and union were in discussions since the beginning of lockdowns. The union had appealed to Sheraton’s general manager, Yolaine Charette, to extend the recall clause for the temporary layoffs by an additional year.
Instead of coming to terms on a mutually beneficial agreement, Sheraton Ottawa management terminated the 70 workers after a year of being temporarily laid off.
Chisholm said that during their talks, management expressed that they valued the hotel staff and wanted them to come back to work, but there wasn’t any work available for them. HSTU Local 261 agreed and wanted the recall clause in the collective agreement extended for an additional year. Management responded that they were interested in agreeing to the extension, according to Chisholm, so long as the union agreed that none of their members would be entitled to any severance and termination pay for the period of an extended recall.
This conditional offer was made possible by a recent change in Ontario labour law. The Ontario Employment Standards Act normally entitles eligible workers to termination or severance pay if they are not given appropriate notice of their termination. An employee can also elect to be paid if they have been laid off for over 35 weeks. However, on December 16, 2020, Doug Ford’s government changed the regulations of these terms and conditions. It specifically gave hospitality employers and unions the power to withhold termination and severance pay for an extended recall period. This includes employees who choose to retire or find new employment during their temporary lay-off.
In a press release, Monte McNaughton, Minister of Labour, Training and Skills Development rationalized behind the regulation change by saying, “Business owners continue to face challenging times during this pandemic, with many struggling to keep their doors open. Having to come up with termination and severance pay at this time could drive many of them under, …[o]ur government will continue to provide businesses with the support they need until they can reopen and return to full operations. We want to ensure employees have jobs to return to when the economy rebounds from the COVID-19 economic crisis.”
During its negotiations with Sheraton management, Local 261 refused this condition on the grounds that they did not know how many members would want to access the pay they qualify for, and would not place a binding agreement on all of them.
Chisholm said that the union offered a few different solutions that would extend recall rights without having the workers’ entitlements restricted. He also stated that management were comfortable with a limited amount of payments, as opposed to payments throughout 2022. Management said they would consider the union’s solutions and would offer a response.
Instead of coming to terms on a mutually satisfying agreement, Sheraton Ottawa management then terminated the 70 workers after a year of being temporarily laid off, in accordance with the collective agreement as it stands. “I was floored by it,” Chisholm said. “We’re actively working on something here.”
“You’ve made all the right noises that you want to have these members back, and you value them as members who contribute to the success of the hotel.”
HSTU Local 261 was notified by the company in advance of these terminations and began contacting its members, including setting up Zoom meetings. Some members reported to the union that they simply received a payment with no explanation or letter as to the reason.
At the time of publication, The Leveller has not received a response from Marriott media relations, Keck Seng Investments or Sheraton general manager Yolaine Charette, who had been out of the office after the workers’ terminations.
One of the former employees, who chose to remain anonymous to secure future employment in the hospitality industry, wrote to The Leveller about their situation. “I felt pretty angry that my employer could simply fire all of us, with no justification or care for the livelihood of my coworkers and myself.”
The former staff member shared a website that Sheraton management created earlier to communicate to staff. It includes answers to frequently asked questions about workers’ employment status and applying for social assistance, a link to the Distress Centre of Ottawa and Region, motivational posters, recipes, and news from human resources. The site was last updated on January 29, with a blog post attributed to the general manager exclaiming “Hello Sheraton Family, Wishing you all a safe and happy New Year!” The post continues to refer to the lockdown in Ottawa, curfew in Quebec, the COVID-19 vaccine rollout, and their hopes to see work at the hotels pick up again in April and May after restrictions loosen.
The post continues, “Our hopes are high that this trend continues and we can welcome you all back — as we all know, your [sic] are the heart of our Hotel and our success! 2020 was truly a tough year for many of you. We are here for you through it all. We wish you endurance, strength, health, and as much happiness as these times can allow. Thank you so much for your patience and we will try to keep you up to date as we have news.”
With hindsight, the former Sheraton employee referred to the blog post: “It made me feel like we were led-on, and that we were simply expendable to them.” The next step, they say, is to find other work to compensate for this loss.
“The hotel industry is one of the hardest hit by COVID-19,” Susie Grynol, president and CEO of Hotel Association of Canada (HAC) stated in a press release. While temporary closures, regulations impacting occupancies, and increased vacancy rates hit the industry hard, HAC had been successful in lobbying for a multi-million dollar federal loan program with low interest rates for independent and chains of hotels. This support for businesses is offered by the federal government alongside an emergency rent subsidy and a wage subsidy, which Sheraton Ottawa is receiving.
In 2019, Keck Seng Investments Ltd, based in Hong Kong, increased its franchise ownership of Sheraton Ottawa from 50% to 85% for a cash consideration of $11.2 million. This allowed for “enhanced management control and greater operating efficiency for the hotel” according to the company’s 2019 annual report. The group reported that the Sheraton’s occupancy rate had decreased to 34.1% for the first half of 2020, compared to 75.7% for the first half of 2019.
Despite federal financial support and international investment, Sheraton Ottawa decided against the union’s proposed recall extension that would come at no additional costs to the employer immediately. With an extension, the 70 employees who were temporarily laid off could return to work when possible, and terminations would be deferred to 2022. Furthermore, an extension would secure the jobs of these workers and provide the hotel with experienced and trained staff when work becomes available. Management seems to prefer to make termination payments and rid itself of unionized workers, when both the province and union had tried to relieve it from having to make these payments.
The provincial and federal governments have both clearly been concerned that the hospitality industry survives the pandemic and retains its properties. This is supposedly for the general good of the economy, and to “ensure that employees have jobs to return to,” to again quote Minister McNaughton. Yet Sheraton’s termination of these workers shows the inherent risk in granting subsidies and favourable regulations to corporations. Sheraton’s action means that federal and provincial support for the hospitality industry has not trickled down to benefit their workers or the economy in general, like it was supposed to.
The news of these terminations reached the public when the union launched a letter-writing campaign among employees calling on the Sheraton general manager to stop the terminations and extend recalls to the employees. Among the first voices to lend their support to the terminated workers have been the Ottawa and District Labour Council, Horizon Ottawa, Somerset Ward councillor Catherine McKenney, and Ottawa-Centre MPP Joel Harden.
Harden addressed his letter to the Sheraton Ottawa general manager and the franchise ownership group Keck Seng Investments — and carbon-copied his letter to the Minister of Labour and Minister of Heritage, Sport, Tourism and Culture Industries, in hopes that the province will intervene to support the workers.
The goal of the public pressure campaign is to have either Sheraton management or the ownership group reverse the decision to terminate employees, stop payments, extend the recall clause by a year, and have workers return to the hotel when the work becomes available. Shortly after March 3, 2021, the Sheraton Ottawa disabled their Twitter account, where supporters of the workers have been raising awareness and tagging the company’s parent accounts.
HSTU Local 261 belongs to the international labour union UNITE HERE! and holds collective agreements in the hospitality and service trades throughout Ottawa and Kingston, including Aramark employees at Carleton University. The collective agreement with Sheraton Ottawa ends on June 30 this year, and now the bargaining unit will be renegotiating with a significantly smaller membership base. The union is also in talks with local hotel management and ownership groups to prevent further situations where temporarily laid-off hospitality workers are being terminated before returning to work.
The former employee who contacted The Leveller said that they are trying to remain as positive as possible. “I am really hoping that the support of the community will put enough pressure on the Sheraton to extend our recall rights, as they should during such unprecedented, difficult times. My colleagues and I want to go back to work as soon as possible.”