Multiple Tim Hortons franchises, other businesses cut pay, benefits, citing minimum wage hike

The Tim Hortons heirs aren't the only franchise owners cutting paid breaks and employee benefits, citing Ontario's increase in minimum wage. Employees at other Tims franchises as well as other businesses have been told they're going to take a hit.

Ontario workers at Sunset Grill, Wimpy's and East Side Mario's say they're feeling the pinch

Employees at several Tim Hortons franchises, as well as other businesses, have been told they're going to take a hit as a result of the recent increase in Ontario's minimum wage. (Evan Mitsui/CBC)

Employees at nearly a dozen Tim Hortons outlets across Ontario tell CBC News they are facing the loss of paid breaks, benefits, and perks by franchise owners citing Ontario's minimum wage increase.

The cuts go beyond the iconic coffee chain, with minimum wage workers at other businesses being told they're also going to take a hit as a result of the hike.

Sources tell CBC News Tims franchise owners are taking similar action in Leamington and Port Hope and at multiple locations in the Cobourg area.

One family that owns six franchises in Durham Region, east of Toronto, is cutting paid breaks at its locations because of what it calls a "massive" increase in labour costs. Ontario's minimum wage rose to $14 an hour from $11.60 on Jan. 1, and it will go to $15 next year.

The details were outlined in a letter handed out to employees and obtained by CBC News.

Employees say this memo was sent to workers at six Tim Hortons locations in Durham Region. It says, 'Effective January 1, 2018 we will no longer be able to provide the benefit of paid breaks.' (CBC)

"I'm sure some of you have wondered that with such a dramatic increase in wages if some or many of you will be laid off or lose your job. I want to assure you we are doing everything we can to eliminate that concern," the owners wrote.

"Unfortunately when wages rise at such a fast pace we cannot raise our prices at the same rate to offset the costs and something has to give."

"Effective January 1, 2018 we will no longer be able to provide the benefit of paid breaks."

This follows revelations first reported by CBC News about actions taken by Ron Joyce Jr. and Jeri Lynn Horton-Joyce, the son and daughter respectively of Tims co-founder Ron Joyce and the late Tim Horton and the married owners of a franchise in Cobourg.

Jeri Lynn Horton-Joyce, daughter of Tim Horton, is served in the Shaikh Zayed Road location in Dubai. This photo was taken for a story published in the Gulf News, a daily English language newspaper in Dubai. (Asghar Khan/Gulf News)

Ron Joyce Jr. Enterprises Ltd. gave staff members a letter to sign indicating that they agreed to a series of compensation changes, including eliminating paid breaks, and asking them to pay the majority of costs associated with benefits.

CBC News has been unable to reach Ron Joyce Jr. Enterprises Ltd.  Employees say the principals are at their winter home in Florida. 

A spokesperson for the Great White North Franchisee Association, which represents Canadian franchise owners who have been squabbling with Restaurant Brands International, their corporate head office, says they have been in touch with Ron Joyce Jr. and Jeri Lynn Horton-Joyce since this story broke.

"They have made it clear to me that because of RBI's statements in the past that they do not want to put themselves in jeopardy by speaking with the media," said the spokesperson, who did not want to be identified.

'Hard-working small business owners'

But in a later statement the spokesman defended Ron Joyce Jr. and Jeri Lynn Horton-Joyce. "They, like many Ontarians, are hard-working small business owners who are striving to keep their business viable and keep all of their employees employed."

The move by the two prompted a sharp response from Ontario Premier Kathleen Wynne.

"To be blunt, I think it's the act of a bully," said Wynne in an interview with CBC News.

"And if Mr. Joyce wants to pick a fight, pick that fight with me and not the people who are working at the service window of the stores."

"Tim Hortons is a really important part of daily life of millions of Canadian families. But so is having a decent living wage," she said.

The franchisee association responded that Ron Joyce Jr. and Jeri Lynn Horton-Joyce have "chosen to make a business decision based on the fiscal realities that have been thrust upon them by the premier and her government."
People stand outside a Tim Hortons location in downtown Toronto. Actions taken by the son and daughter of the chain's co-founders to cut employee benefits at a franchise in Cobourg are 'the act of a bully,' Ontario Premier Kathleen Wynne said. (Evan Mitsui/CBC)

Tim Hortons franchises are not the only businesses responding to the minimum wage increase by cutting in other areas. 

In a thread posted on Twitter, columnist and freelance writer Andray Domise posted a copy of a document — which he shared with CBC News — outlining increases to the tip-out at Sunset Grill, a popular Ontario chain of breakfast restaurants, in the wake of the wage hike.

Servers at restaurants are often required to pay some of their tips out to other workers who don't receive gratuities.

Sunset Grill is raising the amount servers have to pay "to ensure the continuation of successful operations following the increases of minimum wage rates."

People are very upset about it. — A Sunset Grill server

"Coinciding with that 20 per cent increase in minimum wage they get hit with a 25 per cent increase in their tipping clawbacks," Domise said. 

It's unclear how the increased clawback on tips would offset costs. 

A recorded message at Sunset Grill's head office said it was closed and no one would be available until Jan. 8. 

A Sunset Grill server who asked to remain anonymous told CBC News their wage increase is now effectively nil. 

"This is a big deal and it's just really about the principle of it all and how it's happening," they said. 

"People are very upset about it."

"That [increase] helps with groceries. I work with one girl who supports her husband and her daughter; she's the sole earner of the household. So for some people it does mean a lot."

Servers at Wimpy's and East Side Mario's, Ontario restaurant chains, also told CBC News their tip-outs went up as of Jan. 1. In the case of East Side Mario's the server said he will be paying out 30 per cent more. 

No longer salaried employees

Other businesses are making changes to employee status or benefits.

A memo outlines employment changes for casual drivers at Victory Ford Lincoln Sales in Chatham, Ont. 'You will no longer be considered an employee ... but rather an Independent Contractor and will be paid as such.' (CBC)

A car dealership in Chatham, Ont., sent a memo, obtained by CBC News to its casual drivers stating, "Please be advised as of January 1, 2018 we will no longer be paying by the hour for driving services, instead we are switching to a 'Per Trip' payment."

"You will no longer be considered an employee of Victory Ford Lincoln Sales Ltd. but rather an Independent Contractor and will be paid as such."

An employee at the dealership directed inquiries to the manager, who did not immediately respond to an email seeking comment. 

Employer changes his mind

At Rainbow Foods, a specialty food and supplement store with two locations in Ottawa, employees were set to lose two paid 10-minute coffee breaks under a new policy implemented after the wage hike.

"Minimum wage workers in Ontario like me are going to be retaliated against," said one employee.

Co-owner Mischa Kaplan told CBC News his only other choice would have been to cut staff.

But since the publication of this article, Kaplan says he has reversed the decision.

"We've gone back to what we originally had in place, mainly due to some customer and employee concerns that were raised," he said.

"Our plan is to find a consultative solution that can mitigate the extra costs from the new legislation."

About the Author

Aaron Saltzman

Senior Reporter, Consumer Affairs

Aaron Saltzman is CBC's Senior Reporter for Consumer Affairs. Tips/Story ideas always welcome. aaron.saltzman@cbc.ca twitter.com/cbcsaltzman