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Winnipeg Free Press - PRINT EDITION

Civil servants collect severance, stay on job

By: Jason Fekete

Posted: 06/8/2012 1:00 AM | Comments: 0

OTTAWA -- The federal government paid $1.2 billion in voluntary severance last fiscal year to 91,613 public servants who either remain in their jobs, retired or quit on their own -- a perk unheard of by most Canadian taxpayers who are footing the bill.

Business groups and spending watchdogs say the voluntary payouts are both "staggering" and "outrageous," considering Canadians in the private sector are generally only paid severance when they lose their job, not if they continue working or leave on their own.

All told, taxpayers are on the hook for more than $1.5 billion in regular and voluntary severance to 102,589 public servants in 2011-12, according to new federal numbers obtained by Postmedia News.

The total severance payout includes the $1.2 billion to more than 90,000 employees who voluntarily requested the payments, as well as additional cash for those who received regular severance benefits (payment upon termination of employment regardless of circumstances), according to Public Works and Government Services, the department responsible for the payments.

The numbers include payments to federal departments, agencies and most Crown corporations.

The government is projecting it will spend at least another $850 million in the current 2012-13 fiscal year on accumulated severance payouts, including for resignation and retirement, owed to federal employees as per collective agreements signed by successive governments over several years.

The Conservative government, as of October 2010, halted the accumulation of severance benefits for resignations and retirements, but is renegotiating a number of collective agreements with public-sector unions to cover what is already owed.

"It's outrageous. If taxpayers knew what is contained in federal union contracts, we'd have a rebellion on our hands," said Gregory Thomas, federal director of the Canadian Taxpayers Federation.

Along with the more than $2 billion needed to cover the severance expenses for 2011-12 and 2012-13, the government also has earmarked $900 million to cover "workforce adjustment" payments owed to thousands of employees who will be laid off due to federal budget cuts.

More than two dozen collective agreements signed by the federal government and public-sector unions allowed, up to October 2010, for the accumulation of severance to be paid to employees for resignations, retirements, layoffs and other reasons.

The Conservative government is settling the 27 collective agreements that allowed for the accumulation and voluntary payout of severance, while eliminating the perk going forward.

To date, the government and unions have settled nine of the 27 contracts, covering more than 100,000 of the 212,000 employees in the core public administration.

Yet hundreds of thousands of core public servants who accumulated the benefits are allowed to voluntarily cash out the severance while they remain in their jobs. They also can wait until they resign or retire to collect the cash, or receive some of it now and the remainder when leaving the public service.

Of the 91,613 workers who took the voluntary severance payout last fiscal year, 92 per cent chose to receive the full accumulated amount they're owed rather than taking part of it now and the rest when they leave the civil service, according to Public Works and Government Services.

A spokesman for Treasury Board President Tony Clement said the government has moved to eliminate the perk because it recognized that paying severance to people voluntarily leaving their jobs was costly and a tough pill for taxpayers to swallow.

-- Postmedia News

$1.5 billion

The cost of voluntary or regular severance payments paid to 102,589 federal public servants in the 2011-12 fiscal year

$1.2 billion

The amount paid to 91,613 employees who opted to receive the voluntary severance liquidation payment

Approximate percentage of employees receiving voluntarily requested severance who took the full amount rather than accepting a partial payment now before leaving the public service.

-- Source: Public Works and Government Services Canada

Republished from the Winnipeg Free Press print edition June 8, 2012 A17

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