Nova Scotia’s decision to end the long service award for public-sector workers – retirement bonuses that cost the government tens of millions of dollars a year – is proving particularly irksome for union leaders.
In legislation proclaimed this week, the government froze the one-time retirement payment for 41,000 employees retroactive to April, 1, 2015, and removed it altogether for new workers.
Janet Hazelton, president of the Nova Scotia Nurses Union, and other union leaders are adamant the Public Services Sustainability Act is unconstitutional – in particular because it removes the long service award, which she said was freely bargained.
“He (Premier Stephen McNeil) believes the province can’t afford to pay the long service award, but it has been paying it for nearly 35 years,” said Hazelton. “Our position is you can’t take things out of our collective agreement, you have to negotiate it out.”
Government officials have estimated the long service award costs the government about $40 million a year – meaning it would be a retroactive $80 million hit to the budget for 2015 and 2016 if it were lifted.
Still, Hazelton said the law, which effectively imposes a wage pattern of three per cent over four years, is a “mistake” that will cost the province nurses over the long term because of the competitive nature of the profession. Nurses have been without a contract since 2014 and are waiting to bargain with the province.
Although wages are a critical component of retention, Hazelton said other perks and benefits like retirement bonuses are key.
Nurses, similar to other professionals in the public sector, were eligible for one week’s pay for each year of service, to a maximum of 26 weeks.
“They get it (bonuses) in Newfoundland, New Brunswick and P.E.I.,” she said. “We have to remain competitive, specifically with nursing or they’ll leave. It’s that simple.”
The retirement payment has been a specific target of McNeil, who lashed out last December as his Liberal government was locked in a lengthy contract dispute with the province’s 9,300 teachers.
Officials have estimated the long service award costs the government about $40 million a year – meaning it would be a retroactive $80 million hit to the budget for 2015 and 2016 if it were lifted.
“It’s unfair to say we’re going to now give you a bonus to retire and that’s in essence what it (the award) is,” McNeil told reporters at the time.
Hazelton said the award is an easy target for McNeil in a province where the majority of workers aren’t unionized and where many lack benefits.
“He’s counting on most Nova Scotians saying – ‘That’s a pretty rich benefit’,” she said.
It’s an attitude that doesn’t sit well with Jason MacLean, president of the Nova Scotia Government and General Employees Union (NSGEU). MacLean said his membership isn’t about to give up the fight over the long service award and the new labour law because too much is at stake.
“If he (McNeil) can come in and take that piece with the legislation, then he could start taking other articles out,” said MacLean. “He could start attacking sick leave, he could start attacking vacation time or any benefits that were freely and collectively bargained.”
WATCH: It turns out there’s a catch in the McNeil Liberals’ promises on Bill 148. On Tuesday, the province announced it was enacting the long standing wage legislation and, at the same time, asking the Nova Scotia Court of Appeal to test the bill’s legality. But as Marieke Walsh reports, part of the Act is being left out of the test.
The government has asked the province’s appeal court to vet the law for constitutional concerns, but omitted the long service award from the reference.
When asked why, Tina Thibeau, the province’s director of media relations, issued the following statement: “As this is a matter before the court, we will not be speaking to details of the case. While specific sections form the basis of the reference case, the government is confident of the constitutionality of all sections of the act and remain prepared to defend all sections of the act in any future court proceeding.”
The NSGEU said the deferred wage benefit for civil servants known as the Public Service Award was first negotiated in 1974, and a civil servant earning the average wage of $56,000 would have been eligible for a maximum benefit of $28,000 at retirement.
Beth MacPherson, a Halifax-area health worker, plans to retire Jan. 1 after 15 years on the job. MacPherson is single, and said she is dealing with the effects of a job-related, long-term injury.
She said she will take a $2,200 hit because of the government’s freeze.
“This particular action was taken with no consideration given to people who were on the verge of retirement,” MacPherson said. “What can we do to make up that money as older workers?”