Federal budget: Government poised to impose new disability plan

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Finance Minister Joe Oliver set the stage in Tuesday’s budget for a labour showdown with Canada’s public servants over the government’s vow to replace the existing sick-leave benefits plan with a short-term disability plan unless a deal can negotiated at the bargaining table within a “reasonable time limit.”

The Conservative government said its commitment to a new disability and sick leave regime is central to its plan to stem rising disability costs while ensuring a “healthier and more productive public service.”

Sick leave is at the centre of the current round of collective bargaining, which has been dragging on for a year. The 17 unions are united in their refusal to give up the 15 days of bankable sick leave public servants are now entitled to for a disability plan proposed by Treasury Board President Tony Clement. His proposal would limit paid sick days to six a year.

The budget made it clear that the government is committed to Clement’s proposal and would prefer to achieve it through a negotiated settlement. It said the government is willing to consider “reasonable improvements” to its tabled proposal and “mutually acceptable design parameters” for the new system.

Although willing to negotiate, the government is booking $900 million in savings in 2015-16 in anticipation of abolishing banked sick leave and shifting employees to the new plan. The $900 million is a big part of the $1.4 billion surplus the governments is projecting this year.

But if the two sides can’t reach a deal in a reasonable amount of time, the government will implement one.

“In the event that agreement cannot be reached, the government will take steps required to implement a modernized, disability and sick leave management system within a reasonable time frame,” the budget document says.

The move is a red flag for unions and tantamount to a take-it-or-leave it deal — and that could lead to the first government-wide strike since 1991. An impasse over sick leave opens the door to the prospect of back-to-work legislation, which the Conservatives have used to end other labour disputes.

Ian Lee, a business professor at Carleton University’s Sprott School of Business, said he expects the government will impose a deal before the election. The government could legislate a deal or force unions to have a vote on its final offer.

“I have no doubt the Conservatives will go to the wall on this. I don’t think they are seeking a strike but they are quite willing to take a strike. To them, this is symbolic of their reform of the public service.”

The government didn’t say when it wanted a deal and there is much speculation whether it hopes for it before the election. The government has acknowledged that it won’t meet its original 2016 deadline to start phasing in the new system.

In its latest proposal, the government is offering public servants six days of paid sick leave a year. Unused sick leave can no longer be banked.

Clement has long argued the existing system is unfair, especially for new employees, because they often don’t have enough sick leave saved to bridge the 13 weeks they have to wait to qualify for long-term disability if it is needed.

The-rule-of thumb for employees joining the public service is to save up enough sick leave to cover that 13-week waiting period so they can get full pay on sick leave rather than resorting to employment insurance.

Clement has long argued the 45-year-old system is failing both taxpayers and employees. The government estimates that 60 per cent of public servants don’t have enough banked sick leave to cover them for the 13 weeks. Many, especially young and newly hired employees, have no banked days at all.

The $44-billion annual wage bill is the government’s single largest operating cost and has been a key piece of the Conservatives’ restraint strategy. It has overhauled the rules for collective bargaining, whacked severance pay, health benefits, pensions and is now targeting sick leave.

The budget, however, didn’t touch public servants’ pension benefits, which some say could be part of the upcoming election campaign.

kmay@ottawacitizen.com
Twitter.com/Kathryn_May_
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