DHL Express Canada to suspend parcel operations due to labour dispute

DHL Express Canada has announced a complete shutdown of its operations due to an escalating labour dispute with the Unifor union and the impact of new legislation, adding further pressure to the country's already troubled delivery industry.

DHL Express Canada workers represented by Unifor

DHL Express Canada employees represented by Unifor (Photo: Unifor)

DHL Express will stop accepting inbound and outbound shipments to Canada starting at 9 p.m. Tuesday, as its Canadian subsidiary prepares to suspend operations on Friday due to the escalating labour dispute.

DHL Express Canada had previously employed replacement workers after temporarily laying off 2,100 independent drivers, warehouse workers and other members of the Unifor union on June 8 in response to stalled negotiations over a new collective bargaining agreement. The union had threatened to strike if no new contract was agreed. At the time, the parcel delivery company warned customers to expect delivery delays of two to three days.

A law banning the use of substitute workers, which is set to come into effect on June 20, forced DHL to act. Under the new law, employers will face financial penalties if they use substitute workers during a labour dispute.

In a statement on its website on Monday, DHL Express Canada said the indefinite ban on shipping would begin at 9 p.m. Tuesday, with all operations suspended at midnight Friday.

"Due to the recent implementation of new labor legislation in Canada, DHL Express is not able to deploy replacement workers or other necessary contingency measures to mitigate the impact of labor action and maintain its high standard of service quality," the company said.

“DHL Express will continue to engage constructively and in good faith with Unifor over a new collective agreement that provides fair compensation to team members while ensuring a sustainable, long-term foundation for the company’s operations in Canada. DHL’s priority is to reactivate normal service to and from Canada as soon as possible,” the statement said.

DHL Express Canada and Unifor, the union that represents a large portion of the company’s workforce, have been negotiating for nearly a year to extend the current labor agreement.

DHL has offered a 15% wage increase over five years, with a 5% increase in the first year of the contract, new allowances for certain job categories, increased pension and benefit contributions, and increased union representation. The company is also looking to modify its driver-owner compensation model to respond to changing market conditions. The company said drivers will still receive competitive compensation and increased vehicle reimbursement.

"While we are committed to fair compensation for our employees, our position is that UNIFOR’s demands – a 22% salary increase for hourly employees, as well as a 42% salary increase for owner operators – do not reflect the current economic landscape and would jeopardize our operational viability," DHL Express Canada said in a separate statement.

The union said DHL is asking for concessions that would negatively impact the wages and working conditions of DHL members, including independent drivers. The union is opposing a new driver pay system that would not pay drivers for distance traveled within 62 miles (about 100km) of their base to reach their routes or pick up packages, and it is opposing greater latitude for the company to fire employees. The two sides have given conflicting information on whether minimum driver guarantees will increase or decrease.

In addition to wages, Unifor’s other priorities include access to clean restrooms, issues of supervision and automation, and worker treatment.

DHL Express’s suspension of parcel service coincides with a labor dispute at Canada Post, where employees are refusing to work overtime, which is slowing some deliveries.

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