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Union contract includes sick-day payout

Benefits came into effect on ratification but final draft hasnt been completed

Provisions in the latest collective agreement between the City of Powell River and CUPE (Canadian Union of Public Employees) Local 798 included a payout to members for banked sick days.

In 2011, city officials paid out almost $1.2 million in sick bank credits to 45 CUPE members.

The city and union announced on November 1, 2011 that they had ratified a new collective agreement, which covered the period from January 1, 2010 to December 31, 2012. The memorandum of agreement between the city and CUPE included a wage increase of one per cent in 2010 and 2011 and 2.25 per cent in 2012, changes to sick leave benefits, joint job evaluation and a number of housekeeping changes.

According to Councillor Chris McNaughton, at the date of transition to the new short-term and long-term plans, the city owed $1,443,466 in sick credit benefits to approximately 45 CUPE employees who attained full-time status before March 4, 2003. In accordance with the collective agreement, each of these employees was entitled to accumulate up to 180 days of sick leave, of which up to 90 days of unused sick bank would be paid out upon termination of employment.

“Employees attaining full-time status after March 4, 2003 were covered by short-term disability benefits that are fully funded by the city,” McNaughton said. “These employees were not entitled to accumulate banked sick leave.”

The memorandum of agreement between the city and CUPE created parity among all CUPE employees with respect to sick leave benefits, explained McNaughton. “The agreement placed all CUPE employees under the employer-paid short-term sick benefits plan and ended the accumulated sick leave opportunity for the 45 employees eligible for this benefit,” he said. “The agreement provided for payout of this funded liability to eligible employees by way of an RRSP contribution. The city agreed to provide for the maximum RRSP payment for each eligible employee commencing one month after transition to the new plan.”

The city paid out $1,193,000 in sick bank credits in 2011. It has a further liability of $250,473 for sick bank credits to be paid out in the future.

The payouts came from a fully-funded account, according to Dave Douglas, director of financial services. Over the years, the liability account has been set up through the city’s budgeting for wages and benefits.

At the end of 2010, the balance of employee benefit obligations for all classes of employees inclusive of CUPE, firefighters, management and Powell River Public Library employees was about $2.1 million.

At December 31, 2011, the total was $877,205.

A third party actuarial assessment of the city’s payroll liabilities is done every two years. McNaughton explained that an actuary is a person who calculates future obligations by projecting current obligations forward, based on risks, statistical records, interest rates, probabilities and assumptions based on best estimates. The future rate is then discounted back to present value of the obligation.

While the collective agreement has been ratified, it has not been signed yet because a complete draft of the document has not been finalized.

Council has requested a workshop about the collective agreements with CUPE and the IAFF (International Association of Fire Fighters) in preparation for bargaining, McNaughton said. The IAFF contract was up at the end of 2011.

McNaughton added it is expected that the first part of the review will be open to the public as an information session. “The memorandum of agreement is the first stage toward establishing final contract language,” he said. “The final agreement language is being prepared by CUPE. It is unfortunate that the completed collective agreement is not yet available, hampering our ability to make the document available to the public.”

CUPE representatives did not provide a comment to the Peak.