Manitoba

Terminated Winnipeg health authority workers must pay back part of severance, give monthly employment reports

CBC News has obtained a copy of the confidential severance agreement given to the 73 managers let go by the Winnipeg Regional Health Authority, and law experts say it raises a number of questions.

Law prof calls the agreement unusual

Clawing back a severance is well within the Winnipeg Health Authority's legal rights and is not surprising, Prof. Bruce Curran says. (CBC News)

CBC News has obtained a copy of the confidential severance agreement given to the 73 managers let go by the Winnipeg Regional Health Authority, and law experts say it raises a number of questions.

The agreement includes provisions that force the terminated employee to give back a portion of their severance when they get a new job, and a requirement the out-of-work employees report to the WRHA if they have found employment. 

Bruce Curran, a professor with the University of Manitoba's faculty of law, reviewed the agreement and said he would advise a client not to sign it.

"I would recommend they not sign the agreement at this stage. Often times from a strategic stand point, employers will give a low ball offer in their original settlement proposal," Curran said. "They should refuse to sign at this stage and attempt to negotiate a better agreement." 

One former manager has already filed a wrongful dismissal suit against the WRHA, a suit that will likely be settled out of court and confidentially, Curran said.

The WRHA's chief human resources officer said of the 73 managers terminated on June 6, only nine haven't signed it. He argues this is a sign it was a good deal. 

"This would suggest that is a fair and reasonable package," Dave Leschasin told CBC News. 

The layoffs are part of a mandate by the Pallister government to cut 15 per cent of WRHA management as it works toward finding $83 million in savings in this year's budget.

The agreement includes a severance payment in lieu of notice, which is mandatory under Manitoba's employment standards code if a worker is let go without notice.

It also includes a lump sum severance based partially on the employee's length of service.

Clawbacks common with severance: law prof

Curran said it is normal for an employer to claw back severance when a laid-off worker gets a new job. However, he said, it is more common to be offering a severance in the form of a bi-weekly pay cheque which stops when the person gets a job.

He noted that clawing back a severance is well within the authority's legal rights and is not surprising.

"Employers are entitled in a settlement agreement to attempt to claw back the amount of money [after the worker gets a job]," he said. "The reason for that is that, at law, the notice period is meant to act as a cushion for the employee until they get another job."

As for monthly reporting, Curran says that is rare. 

That the benefits and pension ended on the day of termination, with no provision spelled out how the WRHA would compensate for the loss, sparked his concern. He also examined the length and amount of severance on the table and felt it was a "low ball."

CBC News will not be revealing the precise terms of the severance in order to protect the identity of the employee who leaked the document.

"Typically, you expect the public-sector employers to be a little more upright in terms of the settlement and not low ball," Curran said. "I am not quite sure what is behind it other than to justify the savings they are supposedly claiming by virtue of terminating all these managers."

'A responsible use of taxpayer money'

Leschasin said the terms of the contract follow Manitoba's employment standards and common law.

He has worked in human resources for 40 years and says he often sees a severance given out in a lump sum, then clawed back. He said offering employees their severance in this manner allows them to choose how to spend it.

"It gives the employees more options. They have more flexibility," he said. "It is quite common to do it either way [lump sum or bi-weekly payments]."

He stressed the point of severance isn't to give a terminated employee a bonus, but to provide them with a cushion until they find a new job.

"Payback [of unused severance] is a logical process," he said. "It is a responsible use of taxpayer money."

As for covering the loss of pensions and benefits, Leschasin said it is rolled into the figure. 

"You have to look at the total severance package, which we will feel is fair and reasonable, taking into account notice requirements, pensions and benefits," he said, admitting it is not precisely calculated into the sum. "It is not precisely mathematically calculated … we came up with a severance formula that is accordance with common law cases out there."

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