Public-sector sick days on life support?

Ottawa calls absenteeism ‘exceedingly high,’ union says government is misleading Canadians

Following months of high-tension negotiations, Ontario’s teachers saw their sick days cut and the right to bank unused sick days removed when their agreement with the provincial government was finalized earlier this year.

As a result, many started using up their sick days, leaving schools searching for substitute teachers to cover the slack, according to an article in the Toronto Star.

Just days later, the federal government announced it planned to tackle employee absenteeism in the public sector, citing an annual absenteeism rate of 18.2 days, including paid and unpaid leave, compared to 6.7 days in the private sector.

"The public service suffers from exceedingly high levels of absenteeism, which is unsustainable for any employer looking to run a high-performing and productive workforce," said Tony Clement, president of the Treasury Board in Ottawa.

Sick days have been a regular feature in collective agreements for years, but judging by the latest activity, unions could face more pressure when it comes to negotiations around this benefit.

The Canadian Federation of Independent Business (CFIB) is fully behind the government’s intent to get a handle on the actual financial cost of these perks, which are not sustainable and not fair, according to Doug Bruce, vice-president of research at the Canadian Federation of Independent Business (CFIB) in Toronto, citing its 2013 report Calling in Sick.

Based on 2011 data from Statistics Canada, it found full-time employee in the public sector were away from work 12.9 days on average, while full-time employees in the private sector were absent 8.2 days. And federal government employees took the most days off (15.2 days) compared to provincial (11.9 days) and municipal workers (10.3 days).

"Why should this segment of employees have these special perks that are paid for by everyone else and, quite frankly, they don’t make much sense in terms of a good workplace policy?" said Bruce. "The question remains: Why do they exist, why do they have them?"

But the government is misleading Canadians, according to Chris Aylward, national executive vice-president of the Public Service Alliance of Canada (PSAC) in Ottawa.

"You cannot take an organization such as the federal government, of approximately 300,000 employees, and compare that to the private sector — that’s like comparing apples to oranges."

A lot of private sector employees don’t have sick leave so it’s hard to know if somebody off work is off on sick leave, he said. And factored into the number of sick days for public sector workers are people on long-term disability (LTD) or waiting to go on LTD.

In the collective agreements, managers also have the right to manage sick leave and they must be satisfied before it’s actually permitted or approved, said Aylward.

"I guess managers need to start doing their job if there is a problem."

But there is no abuse of sick leave in the public sector, he said.

"Our members know that sick leave is an insurance policy for when you’re sick, not a benefit for when you’re feeling well."

And when the government says the absenteeism adds up to a liability of $5 billion, that’s also misleading as federal public sector workers are not entitled to any kind of cashout when they leave. A person could have 2,000 hours of banked sick leave, but once she retires that balance is gone.

"The whole thing about retiring early — again, that’s a myth. You simply can’t say, ‘I have two years to retire, I’m just going to go on sick leave for the next two years,’" said Aylward. "You need doctors’ notifications, doctors’ approval for that. As well, you need a manager’s approval before that’s granted."

What’s off-putting about the Treasury Board’s announcement is those benefits have all been negotiated — in situations where there are tradeoffs and compromise, said Raymond Larkin, founding partner of Pink Larkin in Halifax.

"For it to be singled out as something illegitimate and made a target, it’s not an honest representation of the situation overall."

Clement is "shooting a shot across the bow to the next round of collective bargaining," in 2014, he said, and it reflects the ideological stance of the government if it wants to be seen as hard on unions.

"It’s hard to separate sometimes the political motivations for things from the business motivation."’

But what’s been negotiated in the past is no guarantee of what you will have in the future, said Anil Verma, professor of industrial relations and human resources, and director of the Rotman School of Management, at the University of Toronto.

"The world is a dynamic place and every generation has to deal with the conditions and problems specific to its own situation."

The move to curtail sick days and absenteeism is about cost-containment, especially in the face of global competition, in the name of efficiency, according to Verma.

"The original idea behind banking was that your illness can fluctuate from year to year and if you can bank, then you can make use of it. Of course, that evolved into a situation where teachers could bank forever, ending in retirement where they could take an extra few months or year of salary, and that came under the notice of cost-cutters."

If there is no incentive to come to work and you are allowed to take time off, people will take more, he said.

"It has nothing to do with sickness, beyond a certain level. It has to do with what benefits are available for you to take. And we are all maximizers in the sense that we try to maximize utility."

Banking is a good incentive but lifelong banking "is totally out of step with the whole spirit of having sick days," said Verma, adding personal days that encompass sick days make more sense.

But everyone will likely face some kind of serious health problem and may need to be off work for several months, "so if an employee that has accumulated days in their sick bank is able to maintain their income at a time when they’re in health crisis, it is a valid point," said Larkin. "A system that provides that people get paid their sick bank out at the end, it’s a strong incentive for employees who might otherwise take a sick day or whatever to leave it in there because they’re going to benefit from that at the end."

Short- and long-term disability

Under the current system, it is difficult for ill and injured employees to reintegrate back into the workforce, according to the federal government, so it intends to overhaul the disability management system, which has remained virtually unchanged for the past 40 years.

"It’s time we fix an inefficient system that doesn’t work for employees, who need the support, or for Canadian taxpayers, who are footing the bill," said Clement. "The workplace has changed dramatically since 1970 and we need to find a more effective and efficient way to help employees get back to work as quickly as possible."

The government will introduce a short-term disability (STD) program and overhaul the LTD plan to make for "seamless" integration between the STD program and LTD insurance. The current system provides benefits coverage after 13 weeks of illness.

"We need a 21st century disability management system for a 21st century workforce," he said.

But there are downsides to disability plans, such as reduced income, according to Larkin. Typically, the payment in short-term disability is a percentage of a person’s normal pay while long-term disability is about 60 or 65 per cent of normal pay. There is also, usually, an elimination period, so if someone has 200 days in his bank, for example, then he has to use the first 100 for long-term disability, he said.

And some collective agreements allow people to supplement the LTD payment by drawing out of the bank.

"A person who has this kind of serious health problem also has an economic problem, so presumably the employees are going to benefit from being able to fall back on the bank, and the employers are going to benefit because they’re going to pay benefits, essentially, to an insurer at a lower rate."

And if a plan is administered by an insurance company, it’s more rigid, with a straight test, he said.

"They don’t really take into account the labour relations or human relations aspect that an employer administering it would typically do."

With LTD, an insurance carrier makes the decisions and there’s a qualifying period, said Aylward, who is fortunate to have 2,000 hours of sick leave in the bank.

"If I’m required to go on long-term disability, I have to exhaust all of my sick leave credits before I can even start long-term disability, so those numbers are being factored into the 18 days as well — so it’s very misleading when Minister Clement uses those numbers."

There is no problem with the current system, he said.

"Yes, it’s been there for 40 years… but it’s worked for 40 years, and we know what our members are saying and, for the most part, they want to maintain their sick leave benefits."

But with a STD plan, there will be accountability and transparency, said Bruce.

"You’ll know what the costs are and you can measure success, unlike using the sick days — it sounds like there wasn’t very clear, good information about that, so if you have this cost input, what is the output, so what’s the outcome?"

It’s about getting an employee back to work more quickly, and that’s good for everyone, he said.

"There’s certainly nothing wrong with that and that’s the way it should be. I think what they’ve been using now is ‘Go use your sick days and then we’ll see what happens.’ It’s not a very good way of rehabilitating, getting people back to work as fast as possible."

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