Union slams Loblaw over pandemic pay as company reports nearly $400M profit

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Corey Nilsson has been a clerk at a No Frills grocery store in Oshawa, Ont., for almost 19 years, now making $18.35 an hour in the bakery department. But he has spent his working hours during the past year driving to different stores as a union representative to talk with other clerks about how they’re getting through COVID-19.

“I get calls numerous times a week about the pandemic pay,” he said.

Nearly a year since the top grocery chains in Canada cancelled their $2-per-hour pandemic bonuses for frontline staff in stores and warehouses, the clerks still wanted to know if it was coming back.

They got their answer late last month. Loblaw Cos. Ltd. — the cross-country chain of 2,400 grocery stores and pharmacies that includes No Frills and Shoppers Drug Mart — is reportedly paying a one-time “appreciation bonus” of $25 to $175 to employees, depending on hours worked.

The company will also offer new “discount events” for employees who shop in Loblaw stores, which, coupled with the cash bonus, is expected to “average in the hundreds of dollars” per employee, according to the company.

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“We have heard your feedback and understand the struggle,” outgoing Loblaw president Sarah Davis said in her final note to staff last week.

But Nilsson, who serves as a shop steward and area chairperson for private-sector union Unifor, said it isn’t enough.

“A lot of people, you know, it’s kind of like a slap in the face to them,” he said. “At the end of the day, they’re still the ones out there taking a chance … You’re going home every day and you don’t know if you’re going to risk your family, your kids.”

Loblaw on Wednesday reported net adjusted earnings of $392 million during its first quarter of 2021, up more than 12 per cent from the same period a year ago, on sales of $11.9 billion, a year-over-year increase of 0.6 per cent.

The grocer’s performance is notable given that last year’s results included the great wave of panic-buying by shoppers in mid-to-late March 2020, something analysts thought would be tough to beat.

Irene Nattel, an analyst at RBC Dominion Securities Inc., called Loblaw’s results “solid and better than expected” in a note to investors on Wednesday.

Galen Weston, Loblaw’s executive chairman who is taking over as president from Davis, made sure to express his admiration for employees on an earnings call.

“Our business and our team of over 200,000 Canadians have set a high standard of hitting challenges head on,” he said.

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But Loblaw’s results riled Jerry Dias, Unifor’s national president. In a statement, he said Loblaw is refusing to “fairly compensate frontline workers,” whose hourly wages range from minimum wage to the high $20 range for department managers, according to the union.

Unifor represents roughly 5,400 Loblaw employees. It also represents National Post editorial employees in Toronto, which includes the Financial Post.

Loblaw spokesperson Catherine Thomas said Unifor’s comments “ignore the hundreds of millions we’ve invested in safety and the hundreds of millions more invested in pay and bonuses for our frontlines — including those added just last week.”

In the earnings update, Loblaw said it spent $48 million on COVID-19-related expenses during the first quarter “to ensure the safety and security of customers and colleagues,” up from $32 million last year. The company expects to spend between $65 million and $75 million on pandemic expenses in the current quarter, compared to $282 million a year ago when the pandemic really took hold.

In addition to the employee bonus, to be paid in June, the company is offering three hours of paid time off to get vaccinated and extending its pay protection program for missed shifts due to COVID-19.

“Though our sales were way up, we were less profitable in 2020 than we were in 2019, largely because of our commitments to people,” Thomas said in an email.

Loblaw has also rewarded shareholders through the pandemic, increasing its dividend last year and spending $350 million on share buybacks.

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Thomas said the company made “a conscious decision to delay our usual dividend increases through the early part of the pandemic,” but eventually returned to its normal practice of an annual dividend increase “while continuing our ongoing COVID investments.”

Controversy over the pandemic bonuses has invigorated a national debate on wages for service workers and, in part, pushed federal legislators to review competition rules.

The frontline worker bonuses initially earned Canada’s top three grocers a wave of public praise early in the pandemic. But in June 2020, the chains — Loblaw, Sobeys’ parent Empire Co. Ltd. and Metro Inc. — simultaneously cancelled the bonuses, drawing scrutiny from federal legislators.

A parliamentary committee last month held hearings on competition policy in Canada, partially as a reaction to concerns around the communication between some rival grocery executives before the bonuses were cancelled. All the grocers have said they decided to cancel the wage premiums on their own and have strongly denied any wrongdoing.

Since the backlash, Loblaw, Empire and Sobeys have instituted other bonus programs instead of returning to the original $2-per-hour raise. Sobeys has paid up to $100 extra per week since late last year, depending on hours worked, to staff in locked-down regions. Metro, meanwhile, has issued three store gift cards for staff, each ranging from $75 to $300.