Starbucks employee Brian Murray, centre, and other employees and supporters react as votes are read during a viewing party for their union election in Buffalo, New York. AP
Starbucks employee Brian Murray, centre, and other employees and supporters react as votes are read during a viewing party for their union election in Buffalo, New York. AP
Starbucks employee Brian Murray, centre, and other employees and supporters react as votes are read during a viewing party for their union election in Buffalo, New York. AP
Starbucks employee Brian Murray, centre, and other employees and supporters react as votes are read during a viewing party for their union election in Buffalo, New York. AP

Starbucks workers in New York vote to unionise in a first for company


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Starbucks employees on Thursday voted to join a union at one store in Buffalo, New York, but rejected the union at a second location in the city, marking a major milestone for labour rights in the company.

Employees at one Starbucks location in Buffalo voted to join Workers United, an affiliate of the Service Employees International Union. Vote counting for a third store in the upstate New York city was continuing on Thursday.

Both the union and the Seattle-based coffee chain could still challenge the outcome of the election.

If the results for the first store hold, however, the company would gain its first unionised location in the US in decades.

The victory at one Buffalo store could embolden other baristas to launch organising drives at some of the company's more than 8,000 other US cafes.

Already, three other Buffalo-area stores and one store in Mesa, Arizona, have petitioned the National Labour Relations Board for union elections.

Starbucks had several unionised cafes and a roastery in the US in the 1980s, but all were eventually decertified. It beat back organising campaigns in Philadelphia and New York City, but one location in Canada unionised in 2020.

About 15 Starbucks employees who support the union drive had gathered in a room in Buffalo to watch results.

Many jumped, screamed and hugged when they realised they had enough votes to win the store on Elmwood Avenue, a Reuters witness said.

The vote was 19-8 in favour of joining the union.

Baristas and shift supervisors from the second location on Camp Road rejected the union by 12 to 8.

The closely watched results come as companies consider new union organising campaigns amid a US labour shortage that has already led to higher wages at most large retailer and restaurant chains.

E-commerce company Amazon is facing a new unionisation election at one of its Alabama warehouses after results of the previous election — which the union lost — were overturned last month.

'Saand Ki Aankh'

Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars

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Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term). 

• On the protection component, there is a cap  of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated. 

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.

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Updated: December 09, 2021, 9:13 PM