DHL Express Canada furloughs workers, adding to uncertainty for parcel delivery industry

A labour dispute between DHL Express and the Canadian union Unifor escalated as the company furloughed 2,100 workers, raising concerns about the stability of Canada's delivery service.

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Photo: Unifor

On Sunday, DHL Express Canada furloughed 2,100 delivery drivers, warehouse workers and customer service staff after failing to make progress on a collective bargaining agreement. However, the company said its 50,000 customers would not experience any major service disruptions.

The development adds to uncertainty for parcel shippers in Canada, where Canada Post couriers are also refusing overtime and threatening to strike if a collective bargaining agreement is not reached. The dispute has allowed competitors to grab a bigger share of Canada Post's parcel business, at least in the short term.

DHL Express' customers include China-based e-commerce retailers Temu and Shein, as well as Lululemon and Siemens Canada.

"We have activated contingency plans and will continue to deliver exceptional service to our customers. With the implementation of these proactive measures, we are pleased to confirm that we can sustain our operations throughout our Canadian network, and we do not anticipate significant disruptions to our service," the integrated logistics and delivery provider said in an emailed statement.

DHL Express said it has hired temporary replacement workers to ensure continuity of deliveries.

Unifor has slammed the company for using outside workers ahead of a new Canadian law banning the practice that comes into effect on June 20. The law restricts federally regulated employers, like DHL, from using replacement workers to perform the work of striking union members. "It is reprehensible that this company thinks it can trample on our members' rights to bargain freely and fairly by using strikebreakers," Unifor National President Lana Payne said in a press release.

"In our view, not only is DHL’s conduct clear evidence of bad faith bargaining but also an attempt to undermine the imminent legislative amendments prohibiting the use of replacement workers," Unifor said in a statement Saturday.

A City News Ontario television report showed police escorting contract workers to DHL's Brampton headquarters as they arrived on DHL buses.

DHL has rejected Unifor's claim that the labour dispute could disrupt the Canadian Grand Prix, scheduled for Friday to Sunday in Montreal, noting that DHL's operations for Formula 1 are separate from its local operations in the country. Germany-based DHL Group is F1's official logistics partner, but the transportation of equipment, supplies and vehicles is largely handled by DHL Global Forwarding.

The two sides have been negotiating a new labour agreement for the past eight months.

Last month, DHL workers authorized Unifor to call for a strike on June 8, when legal restrictions on either party taking defensive action expire. DHL Express Canada sent a notice of temporary layoff to the union on Thursday.

Unifor said its workers went ahead with plans to strike after being laid off by the company at midnight Sunday.

"DHL Express remains committed to working with Unifor to reach an agreement and resume regular operations,” the company said. “DHL Express is disappointed that we have been unable to come to an agreement with the bargaining committee. We have been committed to finalizing an agreement that is not only fair to our hourly employees and owner-operators, but also realistically reflects the current economic landscape."

DHL said it had offered a 15% pay increase over five years, with a 5% increase in the first year of the contract, new allowances for certain types of work, increased pension and benefits contributions, and increased union representation. The company is also seeking to revise its driver-owner compensation model to respond to changing market conditions. Drivers will still receive competitive compensation and increased vehicle reimbursement, the company said. The union said DHL is demanding concessions that would negatively impact the wages and working conditions of DHL members, including independent drivers. The union opposes a new driver compensation system that would not pay for distance traveled within 62 miles (about 100km) of the base to reach their routes or pick up packages, and it opposes greater power for the company to fire employees. The two sides have given conflicting information on whether the minimum guarantees for drivers will increase or decrease.

Unifor’s priorities include access to clean and safe restrooms, increased wages, addressing issues of supervision and automation, and the treatment of workers.

“By imposing a lockout, DHL is choosing confrontation over negotiation,” said Unifor Quebec Director Daniel Cloutier.

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