cas THE WESTERN CANADIAN LUMBER WORKER The following article dealing with the IWA COLA clause agreement in British Columbia was prepared by Doug Smyth, IWA Research Director, to show the B.C. membership’s en- titlement under the plan. Members are urged to read the article. carefully, it could mean more money in your pockets. By DOUG SMYTH . IWA Research Director During 1974 the I.W.A. in British Columbia made history when it negotiated a Cost of Living Allowance clause in a one-year agreement — something which has been unprecedented in the history of collective bargaining in North America. Cost of Living Allowance (C.0.L.A.) clauses have traditionally been granted by companies in other industries in return for long-term contracts. In fact, the original C.0.L.A. clause negotiated by the United Automobile Workers with General Motors in 1948 was part of a five-year agreement. The average duration of agreements with . €.0.L.A. clauses today is still between 2 and 3 years. The I.W.A. was the first union to negotiate a major agreement with a C.0O.L.A. clause in a one-year contract. The purpose of the C.O.L.A. is to preserve the purchasing power of the wage you had at the beginning of the agreement. It is one of a few methods unions have devised to try to combat the runaway inflation which has eroded your pay cheque during the past 3 years. Some unions have attempted to negotiate substan- tial deferred increases which take place at the beginning of the second year of a long-term agreement. Unfortunately, it is im- possible to predict the rate of inflation over long periods of time and most deferred increases negotiated over the past few years have fallen far short of protecting the purchasing power of the worker’s wage. Another tack which a few unions have tried is an automatic wage reopener at the end of the first year of the agreement. A reopener means, of course, that the union must be prepared to make the sacrifice of entering into negotiations more often and to strike again if necessary. And the date of the reopener may fall long after economic conditions would permit a good settlement and long after inflation has eroded the worker’s wages. Problems with the deferred increase and the reopener have encouraged many unions to negotiate C.O.L.A. clauses into their agreements, The C.O.L.A. clause is like an insurance policy because it automatically protects the purchasing power of your wage as the cost of living rises. Each time the official Consumer Price Index for Canada increases the C.0.L.A. will add a propor- tionate increase to your wage in order to preserve the standard of living which was negotiated for you at the beginning of the agreement. The amount of C.0.LA. each woodworker will receive is ac- tually determined by the number of points in the All-Canada Con- sumer Price Index (C.P.I.). The current formula is one cent an hour (1c) for every 0.35 point change in the C.P.I. It was set up so that an increase in the cost of living will generate a proportionate increase in the average wage of the woodworkers in the bargain- ing unit. Table 1 shows the calculation of the first cost-of-living adjustment effective January 1, 1975 at the Coast. The first ad- justment realized 18c an hour and was based on the changes in the C.P.I. between November, 1974 and February, 1975. If the cost of living continues to rise at a rate of 9% annually the second adjustment should be approximately 11 to 12c. Table 2 shows that the size of the first and second cost-of-living adjustments will be the same for all 3 regions of the Province because the same monthly C.P.I. figures will be used to measure the increase in the cost of living. But, the effective dates of the adjustments will vary, depending on the effective dates of each agreement. It is important to remember that the Cost of Living Allowance is a float. In other words, the C.0.L.A. payment is separate and apart from the employee’s base rate of pay. It is designed to increase as the cost of living rises and to decrease if the cost of living falls (but no lower than August, 1974, the first month-used to measure the increase in the C.P.I.). In either case the C.O.LA. will preserve the purchasing power of the wage you had at the beginning of the agreement so that you can buy the same quantity and quality of goods and services as you were able to buy on the first day of the agreement: Some companies will actually show the C.O.LA. as a separate item on your pay cheque. Even when it is not shown separately, however, the C.O.L.A. is a float which will rise and fall with the cost of living. Tips on the C.O.L.A. Clause The C.O.L.A. clause is a technical contract provision and it will take some time for both IWA members and their employers to become familiar with it. In order that you receive full benefit from your C.O.L.A, clause it is important for you to check your itemized pay statement to ensure that the following items have not been overlooked. 1. Hourly Payment A company may or may not show the C.O.L.A. as a separate item on your pay cheque. The agreement provides, however, that each employee shall receive a cents per hour C.0.L.A. payment, not a lump sum C.O.L.A. payment at the end of the quarter (3- month period) in which the C.0.L.A. payment should have been paid. Lump sum payments save the company money (in interest charges and administrative costs) but they are not the intent of the agreement. And during the current period of rapid inflation you cannot afford to wait for your cost of living adjustment. 2. Employees covered ; The C.O.L.A. clause requires that ‘“‘each employee covered by this Agreement”’ shall receive the C.O.L.A. in effect for each hour worked during the quarter (3-month period). This means that casual and part-time employees. will receive C.O.L.A. for each hour that they work during the quarter along with full-time employees. Employees in an incentive classification will also receive C.O.L.A. in addition to their straight-time hourly earned rate. 3. C.O.L.A. for Fallers and Buckers at the Coast and Bobtail Shift All of these employees currently receive pay for an 8-hour shift for 614 hours of work. However, C.O.L.A. will be paid on an 8-hour basis so as to preserve the purchasing power of the em- ployee’s daily wage. 4. Hours Worked Table 2 shows the effective dates for the C.O.L.A. adjust- ments under the major Agreements in British Columbia. At the Coast the first adjustment will only be paid on an hourly basis for the hours worked between January 1 and March 31, 1975. (This does not include the lump sum payment for the last twenty-two scheduled shifts at each Coast operation in the calendar year 1974). The second adjustment will only be paid on an hourly basis for the hours worked between April 1 and June 14, 1975. 5. Rollup on Fringe Benefits Probably the most underrated part of the C.0.L.A. clause in terms of the amount of money it generates is the rollup section. (Section 6.) This section deals with certain fringe benefits which “roll up’”’ with increases in the wage rate because they include the straight-time wage in their computation. For example, statu- tory holidays cost more each time there is an increase in the straight-time wage of the worker because he receives 8 hours of holiday pay times his hourly wage. The rollup section in the C.0.L.A. clause requires that the C.O.L.A. in effect during a quarter be added to the employee’s straight-time wage before multiplying by the number of hours of statutory holiday pay. The purpose is to protect the purchasing power of your dollar, so that it will buy the same level of goods and services as it did the day before a statutory holiday. In the current Agreement there are 5 times which are required to have C.O.L.A. rollup. 6. Accident Prevention Committee payments All hours paid for at meetings of the Safety Com- mittee after January 1, 1975 will include C.0.L.A., whether the meetings are held during company time or off company time. For the purposes of the 22-day lump sum C.0.L.A. payment only hours spent at Safety Committee meetings on company time will include C.0.L.A. because these hours are considered to be equivalent to hours worked within a scheduled shift. Example: : An employee has a wage rate of $5.10 an hour and the C.0O.L.A. is $0.13 an hour. His total pay for the purposes of the rollup section is therefore $5.23 an hour. He works 38 straight-time hours in one week and puts in 2 hours at Safety Committee meetings. His pay for the week is as follows: 38 hours x $5.23 — $198.74 Hours worked : Safety Committee hours 2hours x $5.283—_ 10.46 Total 40 hours x $5.23 — $209.20 7. Stand-by time payments Stand-by time payments to shingle mill employees will also include C.0.L.A. for each compensable hour. The calculation of C.O.L.A. rollup will follow the same principles as Accident Prevention Committee payments, including payments for hours occuring within the 22-day retroactive period for 1974. 8. Call time payments The same principles will also apply to hours paid for call time after January 1, 1975 at the Coast and to the 22-day retroactive period for 1974. Call time for the logging sector at the Coast in- cludes early shift and night logging payments. 9. Statutory holiday payments All paid holidays which fall in a quarter in which C.0.L.A. is in effect must include the amount of C.0.L.A. in the holiday pay. Table 3 shows the statutory holidays for which C.O.L.A. will be paid under major I.W.A, Agreements in B.C. For most employees it will simply be a question of paying C.O.L.A. for the straight-time hours they do not work on a holiday. Example: A Coast employee has a wage rate of $5.10 an hour and the C.0.L.A. is $.13 an hour during the first quarter. His total pay for the purposes of the rollup section is therefore $5.23 an hour. He TABLE 1. . CALCULATIO UNDER MA Minus 1c —— 0.35 poin 4.5 points Formula: 0.35 points C.0.L.A. — 18 TABLE 2. . : EFFECTIVE: IN MAJOR At Agreement | (1) Coast Master Agreeme a (2) Southern Interior Master Agreement (3) Northern Interior (a) Northwood Timber 4 and Bulkley Valley Forest Industries | (b) Canfor and Takla Forest Products Ltd) . id (ce) North-Cariboo Forest Labour Relations ~ Association All first adjustments will for November and August, between the February, 1978 The first adjustment will shifts at each operation p TABLE 3. STATUTORY ROLLUP « 4 Agreement ) Coast Master Agreement Logging. Manufacturing - Southern Interior Master A Northern Interior Northwood Timber and Bulkley Valley Forest, Canfor and Takla Forest Products North Cariboo Fe Labour Relations * Only for those employe.