Severance buyout for NAPE OK, but no layoffs 'dangerous,' warns employers' council
$250 million for severance will save money in the long run, says executive director
The Newfoundland and Labrador Employers' Council is raising the red flag on a no-layoff clause that's part of the government's contract offer to thousands of unionized workers.
"To put that in there at a time when the province is teetering on the edge of a fiscal cliff, it's an exceedingly dangerous thing to do," Richard Alexander, the council's executive director, told CBC on Wednesday.
This week, CBC News learned that the offer to the Newfoundland and Labrador Association of Public and Private Employees includes a wage freeze, a no-layoff clause, and a severance payout to anyone with more than a year of service.
Alexander warned the no-layoff clause is "exceedingly rare" in collective agreements.
The government is giving up one of its few tools to adjust the size of the workforce if revenue suffers due to, for example, the price of oil collapsing, according to Alexander.
Plus, he said, it comes at a time when the government has asked agencies, boards and commissions to find ways to save money, a task that will be made more difficult — if not impossible — if those organizations don't have the ability to make job cuts.
Praise for plan to pay out severance
Alexander applauded, however, the provincial government's plan to pay out severance packages to NAPE members.
It will reduce the liability that taxpayers have. It will help government balance their books.- Richard Alexander
Even at the potential $250-million cost, the long-term savings make it a good move, he said.
"That's challenging for government to come up with that kind of money when they're borrowing $2 million a day just to keep the lights on," said Alexander.
"But overall it will reduce the liability that taxpayers have, it will help government balance their books. Not immediately — we're looking at an impact maybe even 10 years down the road."
Board of Trade slams no-layoffs proposal
On Thursday, the St. John's Board of Trade issued a statement that said refusing to consider layoffs means the Liberal government "has ceded its stewardship of the province."
"The taxpayers of this province are left to bear the burden of this agreement for generations to come, as once a clause is introduced it is enshrined to collective agreements only to be removed if specifically negotiated out," said board chair Dorothy Keating in the statement.
"To hope that attrition will be sufficient to deal with our massive debt and overspending is naive."
Ratification meetings for the contract are currently underway.
With files from On the Go