Yesterday, the Redford government sacked the Board of Alberta Health Services after the Board affirmed its earlier commitment to honor $3.2m in bonuses to executives. The government is attempting (with some success) to spin this issue as applying the same spending limits to executives as it has forced on other public-sector groups. According to Minister of Health Fred Horne:
At a time when we’ve asked our front-line providers, including doctors, teachers, and support workers to take freezes in pay, the unwillingness of the AHS’ Board to reconsider its decision on pay-at-risk is completely out-of-step with the government’s priorities - and more importantly, the priorities of Albertans.
While I’m not super sympathetic about executive bonuses going unpaid while workers are getting laid off, this intervention looks to be about political damage control and offloading outrage over the state of the health care system.
This decision has significant labour relations implications. What appears to have happened here is that the government has waded into a contractual relationship between a duly appointed Board and its employees and unilaterally changed the terms of the workers’ employment.
At least that is what it looks like—whether the government will in the end have to pay out the bonuses is unclear. Horne is pretty circumspect:
I will further direct the administrator to review the decision made by the AHS board yesterday to award bonuses for 2012-13.
We don’t think it’s fair these bonuses are payable. Our position is clear.
There is, of course, a big difference between thinking bonuses are “unfair” and trying to get away with unilaterally rescinding the provisions of an employment contract.
But back to the labour relations implications. The most obvious is the impact this kind of intervention will have on the ability of the government to recruit top administrators to the public sector. Recall that Alberta sacked former CEO Stephen Duckett two (or three?) year ago in a similar manner. And it recently just steam rollered its 52 elected school boards and forced a contract upon them without consulting them (with the threat of dismissal lurking in the background). And it is refusing to pay out the seemingly legitimate (if somewhat odious) severance owed to a former AHS chief financial officer.
Anyone coming here to work will want an ironclad parachute and lots of dough upfront.
The more important implication is that the government cannot be trusted to honor its word. Two months ago, Horne noted that it would be inappropriate to interfere in the employment conditions of AHS executives.
Regardless of how people feel about the decision of the AHS board, I don’t think anybody would want me or a colleague to interfere with the terms of their employment they’ve agreed to. It’s a decision for the AHS board.
Then he changed his mind.
This has echoes of the recent prison guard wildcat strike where there was apparently a deal to end the strike that included no retaliation by the government against the guards. With the strike over, the government then retaliated and claimed no such deal ever existed.
Alberta employs about 25,000 workers directly and maybe five times that many workers indirectly (through various agencies, boards and commissions). All of these workers have contracts with the government or its appointed minions. Can any of these workers trust the government to live up to its words?
This is more than a rhetorical question.
The government is currently asking workers to take a series of zero cost-of-living adjustments with the promise of brighter days ahead. Yet government promises look pretty hollow these days. In considering whether their membership will accept a deal, unions negotiators have to factor in whether members will view such promises as credible.
Moreover, employment relationships require a degree of trust among the parties—that each side will ultimately do what they have agreed to do. Sudden and arbitrary changes that simply ignore contractual requirements undermine that trust. If the employer doesn’t have to play by the rules, why do workers?
-- Bob Barnetson