Province reaches framework for tentative deal with CUPE members
No wage increases, severance buyouts for roughly 4,000 public employees
After months of bargaining, the Newfoundland and Labrador provincial government says it has reached tentative collective agreements with Canadian Union of Public Employees (CUPE) members.
"We've provided measures here that will save the province money and we've provided job security for the employees within CUPE," Finance Minister Tom Osborne told the media Thursday.
Part of the agreements with the union, representing roughly 4,000 public sector employees, include no wage increases, severance payouts and changes to group insurance for new employees.
Not so fast
Brian Farewell, national representative for CUPE, says he disagrees with the language used by the province in its press release on Thursday morning.
"We don't have a tentative agreement, we have a framework — I want to make it very clear," he said.
Farewell said bargaining committee members have yet to be properly notified of the working deal, and need to give their input before anything can be deemed a tentative agreement.
With the start of summer holidays fast approaching, he said it's possible the ratification might not happen until September.
Estimated $600 million in severance payout
Severance "is an earned benefit that has been a financial liability for decades," the government said in a press release Thursday morning.
Osborne is estimating the severance payout at $600 million based on preliminary numbers but expects the final number to be "considerably under that figure," as the actual calculation hasn't been made.
"A. We wanted to ensure we had enough calculated and built into the forecasts so that we weren't coming in short. B. Based on the numbers of files that we've processed to date, under the NAPE contract, just a pure mathematical calculation, we will come under the $600 million."
Employees with at least one year of service will be paid one week to a maximum of 20 weeks.
New employees will no longer accumulate severance.
As for the details of the deal, Farewell said after a long negotiation process, and with the province in financial trouble, it's a deal he can live with.
"If I had to evaluate it as a tentative deal in normal circumstances, with a four-year wage freeze and losing severance, I probably wouldn't be doing high handstands," he said.
The framework for the agreement was completed one day before Farewell's retirement.
"I'm glad it's concluded before I retire, but I think CUPE had to play this out the way we did," he said.
"I think some changes were made that we're pleased were achieved. So it took longer than we anticipated, but I think it's something we had to do and I have no second regrets."
No mass layoffs
The framework for the tentative agreement also promises no mass layoffs. Although, Osborne said, layoffs can happen through "regular government operations."
The government is shrinking the public sector workforce through attrition. Osborne said, in the past two years, close to 1,200 jobs — including temporary and contract work — have been eliminated.
"If you layoff, it's your youngest people that are laid off and the majority of those people will take their spouses and their children and leave the province. That's something I don't want to see," the Finance Minister said
"I am absolutely dedicated to continuing, in a very meaningful way, a reduction in the size of the public service through attrition."
Gov strikes tentative deal with CUPE. Finance Minister says measures save province money and provide job security <a href="https://twitter.com/hashtag/nlpoli?src=hash&ref_src=twsrc%5Etfw">#nlpoli</a> <a href="https://t.co/eVEHnlpQBR">pic.twitter.com/eVEHnlpQBR</a>
—@KatieBreenNLCurrent employees qualify for retirement benefits like group health and life insurance after 10 years of service, with an equal employee and employer contribution.
Under the new tentative agreement, new hires will have to reach 15 years of service to qualify.
Premiums at retirement will be calculated on a sliding scale based on years of service, starting at employees contributing 85 per cent, and the employer contributing 15 per cent.
It estimates approximately $25 million per year in savings from the severance payout.
Severance is taxable income for the recipient, and, just as with the NAPE severance packages, the government said the payouts "will help stimulate spending at local businesses."