Bankable Sick Days At Issue In Strike Have Legitimate Political Roots
Posted July 28, 2009 12:00 pm.
This article is more than 5 years old.
TORONTO – Reports that a 36-day strike by Toronto’s city workers ended with a deal allowing them to continue cashing in unused sick days seem unpalatable to some, given that thousands of Canadians have recently lost their jobs.
“Most of us here in Toronto are losing our jobs and trying to make ends meet, while they’re fighting for something that’s not really reasonable,” says Rolando Cruz, 32, a network administrator who also runs the Toronto Garbage Strike Facebook group.
Cruz says he doesn’t understand why the union can’t accept a short-term disability plan as a replacement for the bankable sick days: “If you want a retirement fund, get a pension fund like the teachers.”Details about the tentative agreements won’t be known for several days. However, reports say current workers get to keep their banked days, though they can’t accumulate any more, and new hires won’t get the contested benefit.
Even some union workers feel ambivalent about the sick days plan. As a temporary seasonal worker now in her fifth summer with the city, gardener Heidi Weidelich cares more about job security. She feels grateful to the union for pressing the city to give inside work to temporary staff in the off-season.
“For me, a sick day is a sick day,” Weidelich says. “That’s why I wasn’t really all for the strike to begin with.”
“I worked in the private sector, and when you work in the private sector you can’t bank anything. You’re given what you’re given and that’s it.”
However, the union says the city has never distributed cash for sick days willy-nilly. Labour experts add there are rational reasons behind the controversial policy that the public should know about before feeling resentful.
Union spokeswoman Pat Daley says under the current contract, workers can bank up to 18 unused sick days per year and cash them out at retirement. In the worst-case scenario, the system could cost $250 million as older workers cash out unused sick days when they resign or retire.
Rob Andrusevich, a spokesman for the city, says that amount includes liability for other city workers such as police, not just the two union locals. For union staff, the total liability of the system is about $140 million.
However, the benefit is only open to full-time employees, meaning 10,000 part-time inside workers, such as some child care and public health staff, don’t receive it.
Eligible employees get 1 1/2 sick days per month to use or accumulate.
A worker with 100 days in the sick bank could use them all up if he or she falls ill, since staff must use sick days before they become eligible for long-term disability benefits. The number of days people have varies greatly.
“If you use them, you lose them,” Daley says.
Staff must also provide doctor’s notes after they have used three sick days.
In addition, it’s only after ten years of consecutive employment that employees become eligible to cash in their banked sick days according to a sliding scale.
Daley couldn’t confirm exact numbers, but suggested someone who worked 20 years for the city could get payment for 40 per cent of their sick days, up to four months. At 15 years’ service, an employee could get 30 per cent, up to three months.
“It’s a declining scale based on the number of years service,” Daley says.
An employee would have to work for a quarter of a century with a stellar attendance record to get the maximum payout of 50 per cent of their accumulated days, six months at most.
The banked sick days benefit was negotiated shortly after the Second World War, Daley says, when such arrangements were fairly common.
“When we say it’s decades old, we mean it.”
At the time, many workers didn’t have a pension, so the sick day bank was a way to give them something on retirement. Employers also saw the system as an incentive for people not to call in sick.
Daley says, “If you allow people to bank their sick days and get a payout for them, they’re less inclined to use them. That was the thought at the time.”
Joseph Rose, a professor of industrial relations at McMaster University in Hamilton, says he doesn’t know of any private sector companies with sick day banking plans.
Rose himself has worked at McMaster for 30 years and missed a single day of classes when he had the flu.
The tactic was prevalent in municipalities, school boards and health care, but most have done away with it.
“It’s a disappearing benefit.”
The rise of public sector unionism occurred in the 1960s and 1970s, Rose says. Employers typically used deferred compensation to arrange a collective agreement that would appease employees without affecting taxpayers at the time.
The strategy generally succeeded with higher-wage union workers who felt willing to take less pay in exchange for better benefits.
“I suspect basically it became a means by which public sector employers could enhance the monetary package without it imposing an actual cost in terms of immediate payout.”
Rose compares deferred compensation to no-money-down retail sales. The lump-sum payout on banked sick days doesn’t happen until an employee retires, leaving the employer’s current costs untouched.
“It can become a political way of selling an agreement,” Rose says.
He adds the costs eventually “come home to roost” as longtime staff retire and future taxpayers bear the cost.
Gary Johns, a professor of management at Concordia University, says the system doesn’t necessarily curtail absenteeism, either, because the reward is too far in the future.
But sick days are certainly “legitimate grist for collective bargaining.” Johns says public frustration with the plan arises partly because it’s a difficult benefit to understand.
Rose, too, suggests both sides in disagreements like Toronto’s have reasonable positions. On one hand, the municipality has limited resources to deal with significant financial pressure. Bankable sick days create a large potential cost.
From the union’s perspective, bankable sick days are an earned benefit, negotiated long ago.
To some extent, Rose agrees with the idea that municipalities are taking advantage of the current economic crisis to reduce benefits.
“Presumably, they must have traded something off to get a good sick-leave plan,” he says. “They view it as contract stripping, a take-away effort.”
