OTTAWA – Thousands of federal public servants have been given the green light to cash in plump severance payouts that could total $1.3 billion, despite the fact none of them will actually be losing their jobs, Global National has learned.
The public servants are being paid out as part of a deal that ends a system that gives bureaucrats severance packages when they retire or voluntarily resign.
Generally, private sector employees only get severance pay if they are laid off or fired without cause, but civil servants are entitled to severance even if their departure is planned.
“It’s absolutely absurd,” says Catherine Swift, the CEO of the Canadian Federation of Independent Business. “You would never find severance if you haven’t had an unexpected job interruption in the private sector.”
The Harper government is trying to abolish the practice. PSAC – the largest public service union – signed a contract this year agreeing to move to the private sector’s definition of severance payouts.
In exchange, the federal government has agreed to buy out the severance packages immediately or at a later date.
The public service severance system is meant to compensate for shorter careers and lower pay in the federal public service, said Claude Poirier, president of the Canadian Association of Professional Employees.
Still he admits the policy might be hard to justify to the average taxpayer.
“It doesn’t make sense to continue to work and get your severance right now,” he said, adding that it is going to cost the Canadian public “a fortune” to eliminate.
The government has already set aside $1.3 billion in tax dollars for the payout to PSAC members who have signed a deal ending the severance. The employees have until October to decide when they want to take the payout.
And that could be just the beginning. There are several other unions that the government will have to cut deals with to end the generous severance provisions.
“This is just another example of how governments over the years have betrayed ordinary Canadians by paying and giving excessive benefits to government workers and now the bill is coming due and it’s not a pretty sight,” Swift says.
Derek Fildebrandt of the Canadian Taxpayers Federation said the government is moving in the right direction, but should have waited to fight this battle during broader negotiations when it would have more leverage.
“There’s no way unions could defend this to the public,” he said. “Most Canadians don’t begrudge supporting our universal health care system, national defence and some help for the poor, but what value for money are we getting for that?”
Both PSAC and Treasury Board President Tony Clement declined Global National’s requests for an interview.
Indeterminate employees hired less than a year ago are not entitled to any payments in lieu of severance under Treasury Board’s current interpretation of the agreement. PSAC is grieving the interpretation.
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