Public Values

Public service unions preparing to fight for severance pay

The fight to hang on to public servants' severance pay will be the hot-button labour issue of the new year.

PIPSC President Gary Corbett says about 90 percent of members do not want to give up severance.Federal public servants will be negotiating new contracts in the New Year. Many unions believe that retaining severance pay will be their greatest challenge.

The Public Service Alliance of Canada (PSAC) has already reached an agreement to implement voluntary severance cash-out options for existing employees. Members of PSAC will be able to choose to cash out their severances immediately and keep working, save their severances until retirement or resignation, or a combination of both. Employees hired after the new agreements have been signed will not receive any severance; instead, they will receive a 5.3 percent wage increase over three years, 0.75 percent of which is meant to compensate for the loss of severance.

Before negotiations can begin, unions must choose the method with which to handle an impasse at the bargaining table. Unions representing professional workers have traditionally been reluctant to strike and have generally chosen to solve disputes through binding arbitration. Canadian Association of Professional Employees (CAPE) President Claude Poirier suggests that since "it is easier to recruit clerical and administrative workers than economists and translators," severance should be kept as an employee retention tool.

Gary Corbett, President of the Professional Institute of the Public Service of Canada (PIPSC), said that they won't give up without a fight. "Ten to one of our members are telling us not to give up severance pay," said Corbett. "We're not going to give it up for nothing. Many of our members would go to the wall for this. It's a very contentious issue."

The Montreal Gazette reports "The fight to hang on to public servants' severance pay will be the hot-button labour issue of the new year as federal unions head to the bargaining table to negotiate new contracts to replace those imposed by the Expenditure Restraint Act..."

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Expenditure Restraint Act

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  Ratified Treasury Board agreements: What happens now?

Posted: January 05, 2011

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