Union says workers 'deserved better' after blowing whistle on Cape Breton agency

Workers at the now defunct Cape Breton non-profit organization Island Employment Association "deserved better" for blowing the whistle on their bosses.

That was the central message to a Nova Scotia Legislature committee Friday from the president of the Nova Scotia Government and General Employees Union, which represented the 30 staff members at the employment agency.

The employees were thrown out of work not long after the Nova Scotia government pulled Island Employment's funding in the fall of 2021, months after the Office of the Ombudsman signalled serious financial irregularities at the organization.

Union president Sandra Mullen said this week's report from the province's auditor general, which found more than $1 million had been mismanaged by the employment agency, was "vindication for our former members that they did the right thing" by reporting their concerns to the ombudsman.

"If they hadn't, how much more public money would have been used inappropriately? How many more millions would be gone from the public purse?" Mullen said.

"And what did those 30 people get in return for showing their integrity? They lost their jobs."

Auditor general's report

The ombudsman's findings triggered more in-depth reviews and ultimately an investigation by the auditor general's office. It found "gross mismanagement" within the organization, with more than $1 million worth of questionable spending, and unauthorized payments to the organization's executive director and senior managers.

Although almost all of those who worked for the organization were subsequently hired by organizations called in to replace Island Employment, Mullen said her former members not only lost their union membership in the process, they were paid less and lived under a cloud for having reported on their bosses.

"So not only did they work in turmoil, they were now seeking other sources of employment to replace that, in rural Cape Breton, which is a challenge on many fronts, and they were under the cloud," said Mullen, who called the auditor general's report "bittersweet" for those workers.

Mullen told the all-party committee the provincial government should have fired the executive director, the managers and the board of directors, and allowed the organization to continue under new leadership, sparing the workers the turmoil they endured when Island Employment folded.

But deputy labour minister Ava Czapalay flatly ruled that out as an option Friday. Testifying before the same committee, she told the politicians it was not feasible for the province to take over an independent organization.

"To say that we can go in and dissolve a board or to fire an executive director, that's not within our authority," said Czapalay. "Our authority is the contract for the services delivered."

She said the province went "above and beyond the contract to support" the organization's workers by giving then two month's notice and paying them a severance equivalent to two month's pay, neither of which were included in the contract between the union and the employer.