Tuesday, December 8, 2009

The Dark Side of Privatization

Across Ontario, hundreds of USW 9511 workers are striking outside their employer, Ontario's DriveTest driver examination centres.  Their strike is now entering it's fifth month.  The issue?  The preservation of full-time jobs with benefits. 

In 2003 the Conservative government in Ontario privatized driver's license testing centres.  In exchange for a mere $114 million dollars, the government awarded Serco DES Inc. (of the UK; that's right, they not only privatized a public service, but they outsourced it to a foreign country) a 10-year exclusive contract to provide driver examination tests such as road tests (both passenger vehicle and transport trucks), vision tests, and written examinations.

In the press release issued at the time, then Transportation Minister Norm Sterling said that:
"With this transfer, we are committed to reducing test wait times to no more than six weeks everywhere in Ontario," said Sterling. "Customer service will be improved through innovative service delivery and the government will continue to diligently safeguard the public interest."
 In the same press release, then Finance Minister Janet Ecker said:
"Private-sector involvement in driver examination services will bring efficiency to service delivery, savings to taxpayers and will allow government to focus on what matters most to Ontarians - health care, education, the environment, and a climate for job creation."

As Serco DES Inc. employees across the province now enter their seventeenth week of strike action, let's examine whether the public interest has been served, and whether this privatization has facilitated a climate for job creation.

According to the press release, there were 750 MTO employees at the time of the privatization:
Staffing Implications

Approximately 750 permanent and contract MTO employees are affected by the service transfer. Permanent employees may choose to transfer to Serco DES in accordance with their collective agreement. Staff who choose not to transfer will be entitled to severance packages as outlined by their collective agreement.

Seven hundred and fifty (750) government employees, most of which were full-time with benefits and pension plans.  How many Serco DES employees are currently on strike?  Well, after imposing a 15% pay cut and taking away their pensions, Serco DES has whittled down its workforce to about five hundred (500).  However, they haven't stopped there.  They've turned formerly good jobs into marginal employment: 50% of Serco DES employees are now part-time with no benefits, with no guaranteed number of hours each week, and Serco DES is seeking to convert more employees into part-timers.

So out of the original 750 good jobs, 250 have been lost entirely.  Of the remaining 500, the company has marginalized 250.  That means that only a third of the original jobs remain.  So, did the Conservative government succeed in creating a climate for job creation?  Clearly not.  The privatization of driver testing in Ontario has decimated hundreds of jobs in the province.

Which brings us to the public interest.  With hundreds of jobs eliminated and marginalized, the province and the communities where these workers work(ed) have seen a decline in tax revenues.  Local economies will have seen a decline proportionate to the decline in spending power of these workers.  The ripple effects of job loss and job marginalization in communities are widespread.  Is that in the public interest?  Hardly.

The government trumpeted reduced waiting times as a benefit of privatization.  Well, due to the shoddy way Serco DES treats its employees, they now have a four month backlog of driver's license tests.

Worse, in trying to undermine the union by continuing to offer services by having unqualified managers performing the jobs of driver examiners, Serco DES is creating a burgeoning public safety issue.  Striking workers have documented drivers' tests, for transport truck drivers, which have broken just about every rule in the book.  Serco DES managers are awarding licences to drive transport trucks based on extremely sub-par drivers' tests which do not meet Ministry of Transportation standards.  When one of these improperly tested drivers kills someone on the road, who will be held responsible?

So where is the Ministry of Transportation in all of this?  When the privatization occurred, it was stated that the Ontario government would:
  • monitor driver exam services to ensure they are delivered fairly and consistently across Ontario;
  • continue to establish standards and set policy;
  • continue to regulate fees for driver examination services;
  • ensure legislative compliance;
  • rigorously monitor and audit the new service provider's performance; and
  • apply remedies if contract standards are not met.
Where is the rigorous monitoring and auditing?  Where are they ensuring legislative compliance?  Where are the remedies for failing to meet contract standards?  As a public safety nightmare unfolds, as the provision of public services by a private, foreign company completely unravels because of the terrible way they treat their workers, the Ontario government has remained silent on the issue.  They have done nothing to address what is clearly a failed experiment in privatization of public services.

Serco DES has collected testing fees for hundreds of thousands of backlogged drivers' tests.  They're sitting on a massive war chest of taxpayers' money collected for services they haven't delivered.  They're using this money to conduct a drawn-out siege against the union rather than returning to the bargaining table in good faith.  In addition to enforcing the terms of the contract (which includes penalties for failing to meet service standards), the Ontario government should be seizing these test fee monies and holding them in escrow until service at DriveTest centres resumes.

Do you want to help make a difference?  Don't cross the picket lines.  Tell your 16-year-old that by supporting the striking USW 9511 DriveTest workers, they're fighting for their own future.  We need to fight the marginalization of jobs everywhere, else there'll be no decent jobs in the future for today's teenagers who are having to wait to get their first driver's license.

Contact Jim Bradley, the Minister of Transportation, and demand that he take action against Serco DES for the deplorable way they've treated their workers and for failing to live up to the terms of their contract.

Contact Dalton McGuinty, Ontario's Premier, and tell him what a travesty this experiment in privatization of government services has become.

Tell Serco DES that their deplorable treatment of workers is not what Ontario taxpayers signed on for, and that their union-busting "Q&A Regarding Returning to Work During the Strike" is unethical and disgusting.  Send a message to their employee.questions@drivetest.ca and CustomerComments@drivetest.ca addresses telling them that instead of encouraging workers to betray their union brothers and sisters by becoming scabs, that they should be returning to the bargaining table in good faith, and offering full-time jobs with benefits.

How much profit is enough?  It's time that Serco DES acknowledged that they've crossed the line between profit-seeking and unethical profiteering at the expense of workers and the public.

Update: DriveTest employees ratified a new collective agreement on December 31st, 2009, after nineteen weeks of striking. Thank you to everyone who supported them! Please, remember these workers and the impact of privatization on DriveTest the next time you hear politicians speaking of privatizing public services! Make sure your voice is heard by voting in the next elections!


  1. I hope the valid points you have made sway the disgruntled from their abhorrence to a legitimate, and justified labour action. I doubt it, but it's difficult to reason with people who have their fingers in their ears.

  2. Anonymous,

    What do you mean by a legitimate and justified labour action?

    Are you insinuating that there are people who will be partaking in illegitimate and unjustified labour action?

    Perhaps you should be a little more careful about making allegations as this situation is tense enough as it is.

    Dumbass liberal.

  3. Coming from the USA and having seen so many jobs marginalized and sent overseas, I really think Canadians need to consider keeping your jobs at home.

  4. It appears DES is getting ready to replace striking employees:



  5. Any private company is in for making money. How is this SERCO's fault. We need to be carefull when we are selecting goverments. Generally Liberals are suppose to clean Conservative mess and vise versa. I am a business owner and my company's purpose is to provide good customer service and good profit. If you are not happy with what you have just find another job, why become a headache for all of Ontario. At the end you will still have your job but may companies and its employees will left with none.

  6. GINA, it's easy to tell people to just find another job. But if everyone does that when their companies start competing in the race to the bottom for wages and working conditions, then pretty soon, there's nowhere to go.

    Workers need to stand united in opposition to companies eliminating full-time jobs with benefits. If we don't, we're all going to be stuck working 2-3 part-time jobs without benefits just to make ends meet, while CEOs congratulate themselves for destroying the social fabric of our country by giving themselves multi-million dollar bonuses.

    The DriveTest strike is a righteous fight that everyone should be supporting. There has to be a line drawn somewhere. Maximizing profits cannot be allowed to trump ethics.