USW Canada: Manitoba's Call-Centre Explosion: A Preliminary Overview

This paper briefly outlines the development and diversity of the call centre industry in Manitoba and argues that provincial policy, which has focussed solely on encouraging the growth of the industry, needs to take a more balanced approach that protects community interests as well as business interests.

Why are So Many Call Centres Moving to Manitoba?

Low labour costs
Employer-friendly government policies
Publicly funded training
Community approval

Union Coverage of Manitoba Call Centres

There are an estimated 90 call centres and 10,500 call centre workers in Manitoba

Only approximately 1,500 call centre workers are represented by a union

2/3 of unionized call centre workers work in large, in-house call centres with a long history of unionization

Only approximately 500 workers in private sector out-sourcers are organized

Over 9,000 workers in private sector out-sourcers are not represented by a union.

Unionized workers in large in-house call centres can earn as much as $22 an hour.

Workers in out-sourcing call centres may earn as little as minimum wage -- $6.75 an hour – without a union, but as much as $12 in a unionized call centre.

What Will Determine the Future of Manitoba’s Call Centre Industry?

Legislated rights for all workers

Workers’ Compensation coverage, a higher minimum wage, more comprehensive employment standards legislation, and unjust dismissal legislation restricting employers’ right to terminate workers without cause would help to establish a more secure "floor of rights" for call centre workers. A more stable call centre workforce with some protection against arbitrary termination and the sense of basic entitlement that a living wage provides would also create a stronger base upon which to build organizing strategies.

Increased public oversight of government policies and spending for the call centre industry :

Public funds pay for incentives to call centre employers (e.g., reduced business taxes, tax deductions for research and development), ensure low occupancy, telecommunications and hydro electric costs, and subsidize training programs that create a job-ready workforce to service the industry. Comparable investments are required to protect these workers and ensure that the jobs that are created are stable and pay a living wage.

Lobbying by organized labour :

The Manitoba Federation of Labour must use its influence with the provincial government to remind them of their responsibilities to protect the interests of the working people of the province. Government has a particular responsibility to protect the most vulnerable workers – young people, women, Aboriginal workers, disabled workers, recent immigrants and people of colour – from employers who would use their vulnerability to exploit them. The MFL must pressure the government of Manitoba to use legislation and policy to encourage the development of safe, secure, well-paid jobs for all workers.

Manitoba’s Call Centre Explosion

Can call centres provide good jobs, or is the expansion of the call centre industry always good news for employers and bad news for workers? Have-not provinces such as Nova Scotia and New Brunswick have attempted to become players in the emerging "New Economy" by attracting call centres to their regions. Yet despite considerable expenditures of public money, call centres have so far provided mainly temporary, poorly paid jobs and have contributed little to the overall health of the regional economy. The experience of these provinces is consistent with call centres’ reputation as "electronic sweatshops." But new evidence suggests that, while call centre work is typically insecure and exploitative, workers can sometimes create opportunities to resist management control and organize themselves into unions. When working conditions, job security, and wages are protected by a union, call centres can provide good jobs and be responsible, contributing members of the community. This paper briefly outlines the development and diversity of the call centre industry in Manitoba and argues that provincial policy, which has focussed solely on encouraging the growth of the industry, needs to take a more balanced approach that protects community interests as well as business interests.

Why are So Many Call Centres Moving to Manitoba?

Over the last decade, Manitoba has become increasingly attractive to employers in the call centre industry. The largest concentration of call centres in Canada is still in Ontario, with its large workforce, well-developed infrastructure, and convenient proximity to private sector businesses, NGOs and government offices. Yet proportionate to its population, Manitoba, like other have-not provinces, is attracting an ever-larger share of call centres. Over the past decade, call centres have become increasingly important to Manitoba’s economy. Over 90 private sector call centres currently employ approximately 10,500 workers, representing almost 2% of Manitoba’s workforce. Employment in the call centre sector, in the private sector alone, is expected to top 12,000 by 2005.

What attracts these employers to Manitoba? Manitoba has the technological, educational, and social infrastructure necessary to support the industry and its job-ready, multilingual workforce has the "neutral accents" and linguistic skills desired by outsourcers servicing the North American market. Private sector employers seeking to maximize profits by maintaining low overhead costs have additional incentives. Real estate and occupancy costs, business taxes, telecommunications and hydroelectric rates are among the lowest in Canada, and the Manitoba government offers generous tax incentives to business.

Low Labour Costs:

Manitoba’s low labour costs are especially attractive to employers in the call centre industry, where labour represents 60% to 75% of total operating costs. Slow economic growth, an exceptionally service-dependent economy and a low minimum wage ($6.75) have helped to keep wages low even when alternative jobs are available. Although unemployment, including youth unemployment, is consistently lower in Manitoba than in other provinces, both average yearly earnings ($27,178) and average hourly wages ($14.64) in Manitoba are also considerably lower than the Canadian average ($31,757 annually and $17.23 hourly). Almost 70% of Manitoba’s economy depends on service-producing industries. This has resulted in fewer secure, well-paid, interesting jobs with a future than in most other provinces. This is especially true for the 50% of Manitobans who have only a high-school education or less. The shortage of good jobs is reflected in the average income per capita, which is 14% below the national average and higher only than the other have-not provinces: Nova Scotia, New Brunswick, PEI and Newfoundland. Manitoba’s workers appear to be well-disciplined to the limitations of the local job market. They have not only learned to expect low wages with little chance of advancement, but tend to remain with the same employer longer than their counterparts in other provinces. The relative economic disadvantages experienced by working people in Manitoba, in other words, help to create a workforce with low expectations and few options – and one that meets the particular needs of call centre employers.

Employer-Friendly Government Policies:

The growth of the call centre industry can also be attributed to its aggressive recruitment by the provincial government. Manitoba’s government actively courts call centre employers and has developed several websites targeting call centre employers and encouraging them to locate in the province. Two government agencies, Manitoba Energy, Science and Technology and Industry, Trades and Mines, actively promote the call centre industry and are partnered with a private sector organization, the Manitoba Customer Contact Association (MCCA), whose mission is to support the call centre industry in part by lobbying government for policies favourable to it.

Publicly Funded Training:

Manitoba’s public education system has also allocated public resources to service the needs of call centre employers. Post-secondary programs to train call centre agents are offered by Red River College (in English) and the Collége Universitaire de St. Boniface (in French). At the secondary level, River East Collegiate provides trainees to call centres through its Career Internship Program. Ten private business and career colleges also offer programs that promise to prepare workers to be call centre agents, but these are not directly publicly funded.

Community Approval:

Centre employers have been welcomed warmly by the local business and non-profit community. Convergys, a USA-based multinational outsourcer with 45 call centre locations in North America, Latin America, Europe, the Middle East and Asia that has actively resisted efforts by its Winnipeg workers to organize themselves into a union has been called a "benefit to the province" by provincial cabinet ministers of the former government. In 2001, Convergys received two United Way awards, the Conference Board of Canada’s Youth Employer of the Year Award for Manitoba in 2000, the 2000 Volunteer Award for Manitoba Business, and awards for Excellence in Call Centre Management, Best Training and Performance, and Community Action. River East Collegiate recognized the company as a Distinguished Partner for its participation in their Career Internship Program.

How Extensive is the Call Centre Sector in Manitoba?

Call centre operations have fully penetrated Manitoba’s private and public sectors.

Public Sector:

Like citizens in other provinces, Manitobans access a wide variety of public services through public sector call centres, including:

Canada Post (federal)
Manitoba Public Insurance (MPI), provincial auto insurance provider with over 1000 employees
Healthlinks, provincially-run health information hotline providing medical advice from 23 sites on a 24-hour basis
Manitoba Hydro

Private Sector:

Private sector call centres range from very small, out-sourcing operations with fewer than twenty workers to large operations with more than a thousand employees, both in-house and out-sourcing.

In-House:

Some of the largest in-house private sector call centres in the province are:

Manitoba Telecom Services (MTS), the regional telephone service provider offering a wide array of telecommunications services with over 3000 employees
Royal Direct, an in-house arm of the Royal Bank, with over 500 call centre workers
CN North America, with over 350 full-time call centre workers
CP Rail, with over 500 call centre workers
Air Canada Reservations, with 300 full-time and 100 part-time call centre workers
Great-West Life, an insurance company headquartered in Winnipeg with over 100 call centre workers.

Out-Sourcing:

Winnipeg, Manitoba’s largest city, has been heavily penetrated by outsourcing call centre firms engaged in telemarketing, customer service, operator services, and market research. Large multinational firms such as Xentel, Gage, and Archway, which have established call centres in Winnipeg, are increasingly locating new call centres in smaller cities, such as Brandon, Selkirk, and Beausejour. Some of Manitoba’s largest outsourcing call centres are:

Convergys, a large multinational outsourcer, with over 1500 Manitoba workers.
Angus-Reid, a Canadian market research firm with over 850 Manitoba workers
TeleSolutions International, a multinational with over 500 Manitoba workers
Faneuil ISG, a multinational with over 300 Manitoba workers
Xentel, a large multinational with over 250 Manitoba workers

While most of the in-house operations are primarily or solely engaged in out-bound calls, the outsourcers generally combine in-bound and out-bound. Some, such as the market research firms and the telemarketers, are completely out-bound. Even a local union, the Manitoba Government Employees Union (MGEU), has established an in-house call centre to provide member services.

How Much of the Call Center Sector is Unionized?

Unions everywhere have achieved only limited success in organizing call centres and this is certainly true in Manitoba. Out of an estimated 10,500 private sector call centre workers in over 90 call centres in Manitoba, only approximately 1,500 are represented by a union. Of that total, two-thirds (1000) work in large, in-house operations of businesses that have a long history of unionization: Air Canada, CN North America, CP Rail and Manitoba Telecom Services (MTS). Only 500 of an estimated 9,500 workers in private sector out-sourcers are organized, leaving the vast majority with few legislated rights and no union protection. Unionized workers in large in-house call centres that are engaged in in-bound sales and provide a variety of customer services earn between $11 and over $22 an hour. Unionized workers in out-sourcing call centres making in-bound and out-bound calls, many of them telemarketing, do much less well, earning as little as $7 an hour (only $.25 above the provincial minimum wage) and as much as $12 an hour. Those in non-unionized call centres may make as little as the minimum wage ($6.75).

While the pay scales in unionized out-sourcing call centres do not approach those in the unionized in-house call centres, they tend to be slightly higher than in similar call centres without unions. Private sector call centre workers who are represented by a union also get important non-monetary benefits such as progressive discipline, grievance procedures and protection from arbitrary dismissal. Arbitrary scheduling and unpredictable of hours of work are often a problem for call centre workers, and union contracts may require employers to post a work schedule in advance and compensate workers for last-minute schedule changes. Negotiated seniority rights may be applied to promotion, lay-off, opportunities to switch between full-time and part-time status, and shift scheduling. Union contracts may also provide for paid breaks (not required by Manitoba’s Employment Standards Act), paid and unpaid leaves, and scheduled vacations. Preliminary research suggests that workers in these centres value the enhanced job security and stability a union provides, even if unionization does not result in significantly higher pay.

Public Sector:

Manitoba’s unionized public sector call centre workers, together with unionized workers in large in-house firms, are among the best paid and most secure of all call center workers. But even within the public sector, where call centre workers perform tasks that are recognised as bargaining unit work when they are performed elsewhere, unionization of call centre work is not automatic. Nor are all public sector call centre workers in the same bargaining units as those in more traditional work settings, even when their work is essentially similar.

Private Sector:

In the private sector, most unionized call centres are in-house operations in established firms, some of them former Crown corporations, with a long history of unionization. These include Air Canada’s reservation centre, CN North America, CP Rail, Manitoba Telecom Services (MTS) and Manitoba Hydro. Workers in these call centres have good job security, seniority rights, and pay – some make over $20 an hour.

New organization in the private sector, especially among outsourcers, is difficult. Yet, as recent successes by both the United Food and Commercial Workers (UFCW) and the United Steelworkers of America (USWA) have shown, organizing call centres is not impossible. Within the last three years, the UFCW has organized two medium-sized outsourcers: Faneuil ISG, whose almost 350 agents take mostly in-bound calls and service mostly high-end corporate accounts, and Integrated Messaging Inc. (IMI), whose 130 mostly part-time order-takers and telesales agents do both inbound and outbound calls. At about the same time, the USWA organized CanTalk, a medium-sized outsourcer providing instant, over-the-phone translation and operator services. Maintaining these bargaining units, however, is complicated by the industry’s mobility and typically high staff turnover. When the USWA organized CanTalk, it had a workforce of about 200. Three years later, there are only about 30 operators, almost all of them part-time, suggesting that the employer has simply moved the work to a non-unionized centre.

Union Avoidance Strategies:

The same qualities that have made organized call centres difficult to maintain have enabled most employers to avoid unionization. Manitoba’s generally labour-friendly NDP government notwithstanding, existing labour legislation has proven inadequate to protect call centre workers’ right to organize. Employers’ technological capacity to monitor workers down to the number of keystrokes combined with the extraordinarily strict work rules and exacting procedures that prevail throughout the industry make it easy for employers to use poor performance as an excuse to terminate workers who are involved in organizing.

Even employers who employ questionable and sometimes downright illegal union avoidance strategies – captive audience meetings, intimidation, firing, altering working conditions and remuneration before a certification vote, threats of closure – seem immune to legal sanction. A recent Manitoba Labour Board ruling in favour of Marusa Marketing, which launched an aggressive anti-union campaign in response to a UFCW organizing drive, suggests that it is difficult, even for the Labour Board, to distinguish between unfair labour practices and business as usual in this industry. The highly mobile technology used in the call centre industry, furthermore, enables employers confronted with a union to simply close up shop and move their operations elsewhere. This was the response, for example, of Marusa Marketing (re-named Teleperformance USA) and Telespectrum Worldwide (Canada), both of which closed their Winnipeg operations shortly after organizing drives. Unsuccessful organizing drives were conducted recently by the Canadian Auto Workers (CAW) at Convergys and by the UFCW at the Royal Bank’s call centre, Royal Direct.

What Will Determine the Future of Manitoba’s Call Centre Industry?

While Manitoba’s government has offered considerable inducements to call centre employers, it has so far failed to adequately protect the interests and rights of those who work in them. Despite Manitoba’s relatively even-handed labour laws, which, thanks to the more balanced approach of its NDP government, have not been decimated as they have been in some other provinces, government policies appear to favour call centre employers at the expense of call centre workers.

Securing the Floor of Rights:

Call centres typically employ some of the most vulnerable members of Manitoba’s workforce – those without a postsecondary education, young and Aboriginal workers, recent immigrants and women. Call centre workers who are injured on the job are not normally eligible for Workers’ Compensation, because call centres are not automatically covered by WCB. Even in unionized call centres, workers typically earn between $7 and $12 an hour, wages that leave even full-time, full-year workers (the minority) under the poverty line. A higher minimum wage, more comprehensive employment standards legislation, and unjust dismissal legislation restricting employers’ right to terminate workers without cause would help to establish a more secure "floor of rights" for call centre workers. A more stable call centre workforce with some protection against arbitrary termination and the sense of basic entitlement that a living wage provides would also create a stronger base upon which to build organizing strategies.

Good Jobs or Bad Jobs?

Increased public oversight of government policies regarding call centres is also necessary. The province is using public funds to provide incentives to call centre employers (e.g., reduced business taxes, tax deductions for research and development) and to develop a job-ready workforce to service the industry. But it has not made comparable investments in protecting those workers or ensuring that the jobs that are created are stable, reasonably well-paid jobs rather than temporary "McJobs." Organized labour, through its provincial representative, the Manitoba Federation of Labour (MFL), must use its influence with the provincial government to remind them of their responsibilities to the working people of the province.

Government has a particular responsibility to protect the most vulnerable workers – young people, women, Aboriginal workers, disabled workers, recent immigrants and people of colour – from employers who would use their vulnerability to exploit them. Evidence suggests that these are precisely the workers who are employed in the call centre industry. Even when they work full-time, few of those working in private sector out-sourcing call centres, which are the majority of such workers, earn a living wage. The vast majority of call centre workers are not represented by a union and thus have no job security. The MFL must pressure the government of Manitoba to use legislation and policy to encourage the development of safe, secure, well-paid jobs for all workers, including those who work in call centres, Manitoba’s fastest growing industry.