Monday, March 2, 2015

Public-sector negotiations in Alberta

The recent discourse around Alberta’s public sector wages warrants some unpacking. The crux is that the Prentice government is asserting public-sector compensation must be reduced in order to make Alberta fiscally sustainable.

Wage rollback legislation appears to be off the table, according to Finance Minister Robin Campbell. But hard bargaining for those unions with open contracts is (allegedly) ahead:
“We’ll have discussions with the unions, but (the contracts) are legally binding and we will live up to the letter of the law if we have to.” 
“We’re not about to break any contracts, but I can also say to you that we have a number of contracts coming due and there will be some tough negotiations.”
The main contracts that are still open for negotiations are with the Alberta Union of Provincial Employees (AUPE) in health care (both auxiliary nursing and general support) that cover 44,000 Alberta Health Services employees. There are also a smattering of smaller contracts (e.g., post-secondaries, municipalities).

While tough talk about hard bargaining is a nice sound-byte, the government has tied its own hands here over the years. The government has legislated away the right to strike from most public-sector workers in Alberta so the government cannot force a strike (which would give it the opportunity to legislate an end to it). Instead, all of the contracts that are open right now are resolved via binding arbitration (i.e., a neutral third party settles them).

Arbitrators typically look at comparable settlements when they make awards. Given that most other public-sector unions have negotiated wage increases, the prospect for the government achieving significant pay freezes or cuts via are limited unless the government intervenes and legislates a settlement (or the parameters of a settlement).

The Redford government tried this in last 2012 with Bill 46, which turned into a political disaster for the Tories. Such intervention would also likely be found unconstitutional.

What this suggests is that, if Prentice is serious about reducing public-sector costs, he’ll likely freeze or cut operating budgets and prohibit deficits. This will force government departments, agencies, boards and commissions to cut staff in order to balance their budgets. The effects of layoffs are hard to see immediately (and are sometimes ameliorated by the remaining staff working harder) thus layoffs is a politically palatable way to grind the public service.

-- Bob Barnetson

Update: The province has just announced it will be "developing a co-ordinated and disciplined long-term approach to funding for public sector bargaining that is fair, consistent and respectful of both workers and taxpayers." Blah, blah, blah "best practices", reporting in four months. The real message is here:
Recent negotiations have led to settlements that have increased costs significantly. In fact, public sector salaries in Alberta are scheduled to increase by $2.6 billion over the next three years alone.
The province never substantiates or explains the $2.6B assertion and also ignores that Alberta public sector wage costs (which late behind private-sector compensation) costs are largely driven by inflation. Should be an interesting report. Still looking forward to seeing the report the premier commissioned last fall about why morale was so low and turn over was so high in the public sector... .

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