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, but don't factor in large, independent corporations like Canada Post and Bank of Canada, which pay their employees separately.
The government also 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.
"The contracts that the public is saddled with are too rich. It's an unbelievable deal that most federal government employees have."
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 collective agreements, 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 of those employees 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.
Treasury Board president Tony Clement was unavailable to comment on the latest severance numbers, but he recently has been discussing the need to change the culture in official Ottawa to one of "cost containers" instead of "spending enablers."
Clement's spokesman 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 to swallow for taxpayers.
"Our government is always looking to find savings for taxpayers and improve value for their tax dollars and one important way to do this is ending the costly practice of paying accumulated severance for public servants quitting or retiring from the bureaucracy," Sean Osmar, press secretary to the minister, said in an email.
"We know this has been the common practice under old agreements, but it is expensive and is unfair to taxpayers and it is why we have already completed agreements with several unions covering about 100,000 public servants ending it. We expect to finalize future agreements as collective bargaining processes continue."
Severance pay for laid off federal employees is generally between two and four weeks pay for the first year of service and one week of pay for every other year of continuous employment in government, although it can be scaled back in the first year and subsequent years if the employee voluntarily leaves. Federal public servants also receive what fiscal hawks call a "gold-plated" pension plan.
Employees in the private sector usually are paid a few weeks severance for each year served, but the payment is generally only offered to workers who are laid off.
"It is a staggering amount of money paid out to people who are not losing their jobs," said Dan Kelly, senior vice-president with the Canadian Federation of Independent Business, which represents more than 109,000 small-business owners across the country.
While Kelly doesn't blame civil servants for taking the money, he said the reaction from his members when they hear of the voluntary severance payouts is one of "jaw-dropping disbelief."
"People don't actually believe this exists," he said. "I don't think the average taxpayer has a sweet clue just how much they are paying for the perks for government workers."
jfekete@postmedia.com
Twitter.com/jasonfekete
Federal severance payments by the numbers:
* In the 2011-12 fiscal year, 102,589 federal public servants were issued either a voluntary severance or a regular severance payment, at a cost of more than $1.5 billion.
* 91,613 employees opted to receive the voluntary severance liquidation payment at a cost of roughly $1.2 billion.
* Approximately 92 per cent of employees receiving voluntarily requested severance took the full amount rather than accepting a partial payment now and the rest when leaving the public service.
Source: Public Works and Government Services Canada
Original Article
Source: ottawa citizen
Author: Jason Fekete
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