Low-wage part-time Coach employees, whose total monthly pay is often less than the cost of one of the pricey handbags they sell to high-end clients, are getting the axe in the luxury retailer’s 36 stores across Canada.
Staff at a Coach store in Burlington, Ont., are up in arms over the company’s decision, as part of its restructuring plan, to lay them off and focus on employees who can commit 30 hours or more a week.
It’s a move that might seem unconventional in the retail industry. The post-recession trend has been toward more part-time jobs at the expense of full-time gigs as profit-squeezed companies look to cut labour costs by trimming payroll hours, pensions and health benefits.
But it is also a move that means about half of the employees at the Burlington store — and many more across the country — will lose their jobs next month. They were given the legally required notice — about six weeks — and offered no severance.
Karyn Husack, who has worked at Coach a few days a week for extra income, said she and her part-time colleagues were called in for a “quick chat” with a district manager last week.
She was told the company was cutting positions that require fewer than 30 hours a week in stores across the country that make more than $1 million in annual sales so the sales team could develop the kind of deep client relationships it believes will help retain loyal customers.
Husack, who worked in the stock room, was one of the few part-timers who wasn’t laid off. She said she was asked not to tell a friend who works at a Vancouver location because the company was still working its way across the country with its layoff announcements.
She told her West Coast friend anyway.
Husack submitted her resignation letter on Saturday to protest against the way her fellow part-timers were treated.
“I can’t work for a company like that,” she said.
She had been working for the luxury retailer for nearly five years, earning $12.70 an hour. Pay starts at minimum wage, now $11 an hour in Ontario. Employees don’t earn commission but qualify for a monthly bonus if the store reaches its goals, which happens only about three times a year.
Coach says the switch to a workforce that can commit to more availability is in line with its emphasis on the customer experience.
The chain would not provide details about the transition, including how many part-time workers will lose their jobs or whether new full-time hires will be added to offset the loss of part-time workers.
“Part of how we will achieve this elevated service experience will be through how we staff our stores — including the 36 in Canada,” said Andrea Shaw Resnick, Coach’s global head of corporate communications.
“In key stores throughout North America, we are focused on a more full-time staffing model — offering more full-time employment opportunities to current employees.”
Only one of the part-time workers at the Burlington store was offered a chance to switch to full-time employment, the workers said.
Leanna Bicecca, who has been on the sales floor at Coach part time for four years, said she was not offered a full-time position but would have appreciated a chance to try to balance the 30 hour weekly commitment with her four shifts a week at a local spa.
‘“I would have liked it if they had offered it to me, because I could have tried to make it work,” she said.
“I rely on this job as a second income, I know it’s just a part-time job but….”
Bicecca says she doesn’t buy the company’s justification for the dismissals — that part-time employees are less able to build a rapport with customers.
“I think that’s a load of crap, because I was the third-highest seller in the store and my client track book was the second largest,” she said.
Employment lawyer Daniel Chodos said Coach’s move passes legal muster even if it poses moral and fairness questions surrounding the treatment of employees with little bargaining power.
“One of the advantages of having part-time employees is they don’t tend as much as full-time employees to fight their terminations,” he said.
“Often, a) there’s not enough money on the line to justify it, and b) they don’t even know that they have any rights.”
The luxury retailer best known for its monogram-covered clutches and handbags has been struggling to shore up sales in recent years. Its move into suburban malls and outlet shops has had the unintended consequence of making the brand less exclusive and therefore less coveted among elite customers. The chain has already shut down 56 stores this year as part of its turnaround plan.
Coach is also trying to redefine its image in an era of heightened competition in the Canadian luxury segment, as international chains including Nordstrom, Saks Fifth Avenue and Jimmy Choo enter the market.
Those retailers focus on developing deep customer relationships through personalized shopping experiences, building client contact books and hosting exclusive events for their best customers in order to give them a higher-end retail experience. Coach is also planning to double down on the strategy — what it calls “evolving our in-store experience” — in an attempt to recover the brand’s appeal.
“Especially as luxury retail is expanding in Canada, companies are going to greater and greater lengths to try and woo and also retain their best customers,” said Kendra Coulter, a professor of labour studies at Brock University and the author of “Revolutionizing Retail.”
“But, really, how often are people coming in to look at these high-priced items — especially designer handbags that cost hundreds or thousands of dollars?”
Coach’s reorganization in favour of a more committed workforce could be a good sign for the industry if it actually replaces the lost positions with full-time staff and invests in training, Coulter said.
“It’s really interesting, because we do tend to argue [that] what we need are more full-time positions. But if we move to that reality, there could be some negative repercussions on current part-time workers,” she said.
“It could ultimately be good, if more full-time positions are created, so that they’re not asking full-time workers to somehow miraculously do more than they’re already doing without any additional resources or coworkers.”
But it also puts pressure on employees classified as part time but who are expected to work nearly full-time hours, she said, noting especially the many Canadians who work multiple part-time jobs to get by.
“I think we have these assumptions that some of the people in these higher-end stores are making higher hourly wages or more through commission, and this is a case where neither of those is true,” she said.
“So even if you’re making $12 an hour for 30 hours a week, that’s still not very much.”
About half of Canada’s two million retail workers are part time, Coulter said. And while some work fewer hours by choice, there are about a million Canadians working part time who would prefer to be full time.
Coulter said 30 hours a week is basically full-time work, and the Coach example highlights the confusion surrounding defining part-time and full-time classifications and expectations across the sector.
“It raises some challenges for people in terms of full-time availability but part-time hours, and that’s a challenge across the retail sector, where people are only being given a small number of hours yet are being told we need to have you available all week.”
The U.S. recently mandated, under the Affordable Care Act, that any employee working 30 hours a week is considered full time.
Coach did not respond to The Huffington Post Canada’s questions about whether part-time employees working 30 hours a week will be converted to full-time status or whether they qualify for health and pension benefits.
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