What are PEA members' rights and the employer's obligations when government budget cuts lead to job redundancy and employee layoff? The following summary attempts to answer those questions, in plain wording.
Article 37 of the 13th Master Agreement establishes employee rights and employer obligations in this area. But before getting into the details, let's start by defining some terms.
First, and most important, redundancy is not the same as layoff. It is not at all a given that redundancy necessarily leads to layoff. The redundant employee is the one whose job is eliminated. The laid-off employee is the one actually terminated after all the possible alternatives contemplated in the collective agreement have been exhausted.
Second, ‘employees’ are not created equal. The agreement establishes a sequence for making layoff determinations: auxiliary employees are laid off before regular employees; regular employees with lesser service are generally laid off before those with greater service. Auxiliaries have the least protection against layoff; senior regular employees have the most. The collective agreement distinguishes regular employees with less than three years continuous service from regular employees with three or more years. Regular employees with three or more years continuous service have a better list of options after receiving notice of layoff.
Third, ‘bumping’ or displacement is a much misunderstood term. Keep in mind that displacement is not the same as layoff determination. Let's imagine that a layoff occurs in a seniority block [more on that term later] of six employees, ‘A’ through ‘F’. ‘A’ has the greatest seniority, ‘F’ the least. Assume that the redundant position is A’s. Although it is A’s job that is disappearing, not F’s, it is F who stands to be laid off, because F has the least amount of service seniority in the block. That is not displacement, it is simply layoff determination. Displacement occurs after someone receives a layoff notice and elects to bump an auxiliary employee or a regular with less than three years service from his/her job. Bumping may occur across seniority blocks, ministries and geographic locations.
Fourth, ‘service seniority’ means continuous service as a regular employee in the British Columbia public service, including continuous regular service outside the PEA’s licensed professional bargaining unit.
Where the government plans redundancies, Article 37.01 requires that it provide the PEA with reasonable notice, so that time is provided to develop plans for minimizing negative impacts on individual members. When layoff of regular employees is anticipated, the ministry may conduct a pre-layoff canvass to determine whether any employees, including those in positions other than those occupying redundant jobs, may be interested in voluntary placement in vacant positions, voluntary resignation with a severance payment, or early retirement.
When the employer eliminates a position, it issues a redundancy notice to the employee occupying that position. That triggers a 90 day informal placement process. The goal of the informal placement process is to identify voluntary placements or solutions that will eliminate the need to issue a layoff notices.
At the end of the 90-day informal placement process, where placements have not been made, the ministry will issue layoff notices. However, the employee who received the redundancy notice may not be the employee who receives the layoff notice.
Layoff By Seniority -- Within Seniority Blocks
As a general rule layoff is by classification, in reverse order of service seniority within ‘seniority blocks’ as defined in Appendix D of the collective agreement. Service seniority is defined as the length of continuous service as a regular employee in the public service of British Columbia. Note that this definition includes all continuous regular service in the public service; this includes any continuous service outside the licensed professional bargaining unit and excludes any auxiliary service.
When a redundancy is declared and a layoff becomes necessary, who is laid off? To answer that question, we must turn to the seniority blocks defined under Appendix D of the agreement. The purpose of seniority blocks is to circumscribe the groups of employees within which layoff determinations are made. Seniority blocks are built on the general assumption that employees in the block are capable of doing each other’s job – after a period of familiarization.
Seniority blocks segregate employees within professional disciplines (or in some cases, sub-disciplines) by classification, ministry and geographic location. For example, all the LSO 2 Foresters in a district office of the Ministry of Forests will typically be in one seniority block, the LSO 3 Foresters in another. In some cases, particularly in specialized headquarters operations, blocks will be defined along sub-disciplinary lines, i.e., civil engineers in one block, mechanical in another.
Regardless of whose position is redundant, the agreement generally requires that the employee with the least seniority in the appropriate seniority block is the one who is laid off. Let’s go back to our sample six-person seniority block, in which ‘A’ has the greatest seniority, ‘F’ the least. Assume that the redundant position is A’s. Notwithstanding that it is A’s job that is disappearing, not F’s, it is F who stands to be laid off, because F is the employee with the least amount of service seniority in the block. There is a caveat, however – A must be capable of doing available work after a period of familiarization. What happens if A is not qualified to do F’s job? In that case the employer would determine whether B, C or D could do F’s job. One of them would take over F’s job and A would move into the vacated position. F would still be the employee laid off.
Remember that layoff determinations are made by and within seniority blocks, i.e., the junior person in the block in which the redundancy occurs is the one who is targeted for layoff. People in other seniority blocks are not affected at this point. Layoff notices are not transferable from one block to another – members facing layoff in one seniority block are not able to pass the layoff onus on to more junior employees in other seniority blocks, not even those in the same ministry and geographic area. When it comes to determining layoff, it is the junior person in the seniority block who is targeted, regardless of how many more junior people there may be in other adjacent seniority blocks.
Placement of Regular Employees
Once a regular employee is in receipt of a layoff notice, the employer is obliged to try to place the employee, according to the options set out in Article 37. This is what is referred to as the formal placement process. Regular employees with 3 or more years of seniority have different placement options than employees with less than 3 years of seniority.
The placement options for regular employees with less than three years service are set out in Article 37.02 and are limited to displacing an auxiliary employee in a comparable classification within the same ministry and geographic location. If the employee is not placed, s/he may elect to be placed on a recall list for one year, or to be paid severance pay.
A regular employee with three or more years of service who has been designated for layoff has available a 16-step sequence of placement options involving vacancies and displacement (bumping) of employees with less than three years service as set out in Article 37.03. (Employees with three or more years of service may choose to decline these options in favour of the options available to employees with less than three years seniority.) Efforts are directed first to finding a placement at the employee’s current geographic location, at the employee’s current classification or at ‘comparable’ lower classifications -- i.e. those classified not more than four grid levels below the employee’s current classification -- and in the same or another ministry. Placement may be to a vacant position or through displacement of a regular employee with less than three years service. If placement is not made at the employee’s current geographic location, placement options in other geographic locations are pursued. In the event that all options are exhausted without a successful placement, employees may choose severance pay or early retirement (if eligible). Employees may elect not to exercise their displacement options without penalty. However, there are hazards in refusing placement offers into vacant positions. If an employee designated for layoff refuses one job offer at the same classification and geographic location, s/he is deemed to have resigned, without any further options. Someone who refuses one offer in the same location in a different job classification but with the same maximum pay rate, or two offers at other geographic locations or lower classifications, has only two options -- early retirement (if eligible) or severance pay.
Options on Layoff
Should placement through the process outlined above be unsuccessful, an employee's options are as follows:
- Severance Pay. For regular employees, severance is three weeks’ current salary for each year of continuous service, prorated for partial years, to a maximum of twelve months’ pay. Auxiliary employees have no entitlement to severance pay.
- Early Retirement. Regular employees who are eligible to retire and receive a pension (minimum age 55) and who are also eligible for severance pay may opt to retire in addition to receiving severance. However, all entitlements normally received at the time of retirement must be paid out rather than taken as pensionable time.
- Placement on a Recall List. Laid-off regulars with less than three years seniority may elect placement on a recall list. Recall occurs in order of seniority at the employee’s current geographic location. (Note that if a laid-off regular employee is not recalled, the employer’s obligations are exhausted -- neither severance pay nor any other option is available.)
What happens in the event that a dispute arises over interpretation of any of these rules? Article 37 requires that a joint committee of the parties, with a neutral chairperson, will be established to sort out disputes.
The 13th Master Agreement includes Memorandum of Agreement #10 Employment Security. The PEA and Public Service Agency have agreed to apply the change to MOA #10, ensuring the application of Employment Security to all employees who have regular status as of April 1, 2010, pending ratification of the Tentative Agreement dated February 26.
What effect does MOA#10 Employment Security have on the layoff procedures set out in Article 37?
Employment Security essentially boils down to the right to at least one offer of continued employment for regular employees in receipt of layoff notice.
Without Employment Security, employees with less than 3 years seniority have no rights to placement into a regular position (see above). With Employment Security, employees with less than 3 years of seniority have the right to at least one reasonable offer of continued employment; refusal of an offer will be deemed a resignation without the option of severance pay.
Employees with 3 or more years of seniority must exercise their displacement options in order to be covered by Employment Security. Refusal of an offer of continued employment at the same classification and geographic location will be deemed a resignation without the option of severance pay. A regular employee with 3 or more years of service seniority who refuses two job offers in a different geographic location or with a comparable pay range will be deemed to have resigned with applicable severance pay.