Wage rollback, repayment on table as tensions rise between Safeway and its Alberta workers

Tensions are rising between Safeway and its Alberta workers as the company looks to claw back a wage increase after negotiations on a new collective agreement hit a standstill.

United food and Commercial Workers Local 401, a union representing Safeway workers in the province, rejected the most recent collective agreement offer from Sobeys, which owns Safeway. First signed in 2020, the agreement is set for renewal this August.

Of the more than 6,000 Safeway workers in Alberta, roughly half are considered top-rated workers, the highest earners due to seniority. They’re now at risk of having wages rolled back 6.5 per cent by Sobeys. The company is also asking workers to pay back money that a judge ruled was paid to them by mistake in the past 18 months. The amount each worker would have to pay back would vary from worker to worker.

The company chose the 6.5 per cent figure for the wage rollback, to bring the 10 per cent raise that workers had received the last two years after arbitration down to the 3.5 per cent mark that the company had originally pitched.

Sobeys’ most recent collective agreement offer to Safeway workers was a two per cent wage increase in 2027 and again in 2028 for the top-rated workers, and $500 lump sum payments, and less statutory deductions, for the other employees each year from 2025 to 2028.

Andrew Walker, the vice-president of communications and corporate affairs for Sobeys’ parent company Empire, said the offer would see the higher-earning half of Safeway staff remain the highest-paid unionized grocery employees in Alberta. 

But Safeway employees voted to reject the offer. UFCW Local 401 president Thomas Hesse said his members wanted a wage increase that would help them better keep up with the cost of living in Alberta, as well as safer workplaces and better benefits.

Hesse also claimed the union asked for a guarantee from the company to not close stores and to not convert Safeway locations to Sobeys-owned discount supermarket FreshCo, out of concern it could lead to lower wages for workers. He said the company declined to promise these measures.

Now, Hesse says, workers are upset with the wage rollback being suggested.

“Employees are disgusted with them,” Hesse said. “Some of them are talking about quitting, talking about going on strike.”

On the other side of negotiations, Walker says the ball is in the union’s court. He added that Sobeys was clear in communicating to its workers that the wage rollback was on the table if they turned down the company’s offer.

“We’ve made an offer to our top-rated teammates that would maintain them as the highest paid grocery retail workers in the province. That message has been lost,” Walker said.

After an arbitrator ruled in the union’s favour to receive a wage increase, the company took that decision to the Court of King’s Bench to overturn, arguing the union brought forward irrelevant and inaccurate information. The court ruled in their favour, but now the union is appealing the court’s decision, arguing it overstepped by overturning the arbitrator.

Hesse criticized Sobeys’ attempt to reduce wages during an affordability crisis and as Empire continues to record strong earnings.

“To hold this gun to people’s heads without some economic rationalization, without the business being in trouble, a wealthy, very profitable company … it’s criminal and it’s really going to hurt people in a rainbow of ways,” Hesse said.

Throughout the disagreement this month, Local 401 released a TV advertising campaign where an anonymous Safeway worker claims she can’t afford groceries at the store she works at. The union then announced last weekend it would pause the campaign as a measure to ease tensions between the two sides, and in hopes it would influence Sobeys to call off the wage rollback.

The campaign’s claims of a worker being unable to speak up were disputed by Walker.

“They suggest that they supposedly have an employee, a teammate, whose face is pixelated, saying ‘I can’t give my name because I may get fired.’ To suggest that is reprehensible,” Walker said.

‘Beyond the pale’

Barry Eidlin, an associate professor of sociology at McGill University, noted that in his research of labour relations, he’s never heard of a retroactive clawback of wages in the U.S. or Canada, adding it seemed “beyond the pale.”

“It’s just not how collective bargaining is done,” Eidlin said.

He added that the company communicating it would roll back wages if its offer wasn’t taken, in effect, holds the measure over workers’ heads.

Stephen Torscher, a partner with Calgary-based law firm Carbert Waite LLP, said Safeway may not be able to argue that money was paid in error, since it was acting on a previous arbitration ruling.

“They paid an amount that they were ordered to pay because of the arbitration and now that got reversed. I don’t know that you would necessarily call that an error, and I think they might have problems having that sort of thing upheld,” said Torscher, who specializes in labour and employment law.

“If they were to just unilaterally go ahead and try to deduct the overpayment and call it an error, there’s a grievance that’s ready to be filed really quickly on behalf of all those employees.”

He added that the wage rollback and repayment may all simply be used as leverage in negotiations between the two sides, and speculated it could be resolved once an overall collective agreement is reached.