DHL Express Canada workers are on strike after the company locked them out early Sunday morning when the two sides failed to reach a new contract. The union representing more than 2,100 truck drivers, couriers, warehouse workers, and clerical staff says the workers walked off the job at 11 a.m. ET in response.

Unifor says DHL is pushing to change the driver pay system and will bring in replacement workers before new federal rules banning them kick in on June 20.

DHL says it gave workers a lockout notice Thursday, and the next day, Unifor filed a strike notice. In a statement, DHL spokesperson Pamela Duque Rai said the company had offered a 15% wage increase over five years, with a 5% bump in the first year. She added that the proposed pay changes are “designed to address changes to the economic viability and operational structure of the Canadian market.”

“Unfortunately, there simply was not enough progress to result in a new collective agreement,” the company said.

Unifor President Lana Payne criticized DHL for using the time before the new law takes effect to bring in temporary workers. “DHL sees this as a bit of a loophole and a time for them to put maximum pressure on our membership to concede,” she said. “The relationship also worsens when you have an employer that thinks they can use replacement workers.”

Unifor says DHL bused in temporary workers last week for a tour of a sorting facility in Hamilton, Ontario, and hinted it would hire them if a work stoppage happened. DHL did not answer questions about replacement workers.

The company says it has a contingency plan to keep packages moving for its 50,000 customers, including major brands like lululemon, Temu, and Shein. DHL does not expect major disruptions.

“With the implementation of these proactive measures, we are pleased to confirm that we can sustain our operations throughout our Canadian network,” Duque Rai said.

Unifor has been negotiating with DHL since last year, with the last contract expiring on December 31. As talks stalled, workers voted 97% in favor of striking in May.

The union says its top issues are wages, working conditions, surveillance, and workplace automation. It also objects to DHL’s plan to change how drivers are paid, which the union says could force drivers to travel up to 100 kilometers for pickups without being compensated. Owner-operators could also face rerouted pickups and less pay under the new system, Unifor says.