Benefits a sticking point in city of Toronto labour talks

A strike or lockout looms for 28,000 city workers as contract talks continue. Benefits are the major issue.

Thestar.com
Feb. 5, 2016
By Betsy Powell

The city and union representing 28,000 workers say they are working hard to negotiate new contracts to avoid a strike or lockout, but after months of talks, employee benefits remain a major sticking point.

The city wants its staff to pay a “significant premium” to receive a “greatly reduced benefit package,” according to Canadian Union of Public Employees Local 79 which represents 23,100 inside workers. They include child care and shelter workers, nurses, cleaners and planners.

“The city’s proposed changes to benefits are the worst we’ve ever seen,” says a union circular obtained by the Star.

The city also wants its unionized staff to use only generic drugs, produce a “prescription” before receiving physiotherapy and pay premiums for dental and group life insurance benefits.

As well, an employee collecting long-term disability would be charged a premium, potentially costing thousands of dollars every year, the circular says.

Negotiators with CUPE 416, which represents 5,400 garbage collectors and staff in water and parks departments, are also at the bargaining table with a mediator. The issues mirror Local 79, union officials say. Talks began last October.

The outside workers are in a legal strike position - and the city in a legal lockout position — at 12:01 a.m. on Feb. 19. Inside workers could be off the job a day later, although negotiations could continue past the deadline.

The city, on its bargaining website, says even with its proposed changes, employees will maintain “superior benefits” in keeping with other broader public sector employees. “The fact of the matter is that our benefit programs are far more generous than those benefit programs found in the vast majority of other Ontario workplaces.”

The city pays 100 per cent of extended health care, drug and benefit costs for full-time unionized staff. Long-term disability payments climbed to $30.2 million in 2014, a 55 per cent increase since 2010.

Deputy Mayor Denzil Minnan-Wong wouldn’t discuss developments at the bargaining table and said he’s optimistic a work stoppage can be avoided.

“We’re trying to have a conversation with our employees to make them understand that we have certain financial realities that we have to deal with,” he said. “Our costs, specifically with regards to benefits, are increasing substantially so this is the city’s attempts to come to grips with that.”

Tim Maguire, president of Local 79, also wouldn’t talk specifics but said there are other ways for the city to cut costs rather than target employee benefits.

“We think that the city could do various things to save money, find efficiencies in the administration of benefits and not cut deep into our members’ pockets,” he said Friday.

While the union understands the city’s financial constraints, “the city has mismanaged things,” he added.

Maguire said the union also wants more job security for 9,000 part-time employees as well as better notification of their shifts schedule. Only 64 have access to benefits.

Mitch Frazer, a partner and chair of the pensions and employment practice with Torys LLP, who is not involved in the city’s labour talks, said in these challenging economic times, governments and private sector companies across the country are trying to reduce or eliminate benefits, which have been rising above the rate of inflation.

He agreed with the city’s claim that its benefits program is more generous than most, with most private sector employers offering an 80-20 cost-share arrangement.

But Frazer said it’s also reasonable that municipal workers would want to hang onto their benefits, considered “an exchange for compensation” they might have received if they worked in the private sector.

Pension and benefits expert John Jackson, who is also not involved, suggested rather than sitting across from each other “with guns on the table,” the city and union negotiators should work to figure out how to manage benefit programs more effectively and efficiently.

“The city is not the enemy, and the union is not the enemy. The challenge is runaway costs on benefits, that’s the enemy,” he said.

“If you can get those down and managed effectively ... the cost for delivering benefits goes down quite a bit.”