Monday, May 02, 2011

About those fat severance cheques

The federal election shifted attention from the $2.4 million in severance payments made after Christy Clark decided on some post-victory housecleaning. That's only a small part of the total cost - more people were fired as part of the purges.
The Times Colonist had a useful editorial Saturday, reprinted below.

"Generous severances

Taxpayers should feel abused by the rich severance payments to 13 senior managers terminated by Christy Clark days after she took office.

The payments totalled $2.4 million, or about $185,000 per person. The highest payment went to Gordon Campbell's displaced deputy Allan Seckel, who got $550,000. Paul Taylor received $114,000 even though he had only been hired as Campbell's chief of staff six months ago. The amounts will rise once bonuses are added.

The payments -first reported by Sean Holman of -raise two issues. First, did Clark need to terminate all these people, or could they have been offered other positions and continued to contribute? Most could and that would have been less disruptive and saved money.

And second, why are these payments so generous? Employees terminated without cause are entitled to severance and government managers should be treated no differently. Political staff, in particular, live with limited job security -if the election brings a new government, they are likely going to be looking for new jobs.

But severance is not supposed to be a windfall. It is intended to provide replacement income for a reasonable period, allowing the terminated employee to find comparable work. Typically, barring unusual circumstances, courts will award something like one month per year of service. Employers sometimes choose to continue monthly payments, rather than a lump sum, and halt the severance payments once the employee finds a new job.

Instead, the government chose to be generous with taxpayers' money. Finance Minister Kevin Falcon noted the maximum payments were equal to 18 months' pay, and said some of the people had been employees for years.

But in the private sector, the payments would almost certainly be much less.

The payments also highlight the gap between what the government considers fair for itself and for other British Columbians. The Employment Standards Act sets out severance payments for similar terminations. Under those rules, payments are capped at a maximum of two months, no matter how long an employee has served. Taylor's six months on the job would entitle him to severance pay equal to one week's salary.

People in the public sector have to be treated fairly, and pay and employment conditions should be competitive.

These payments go well beyond those standards."


Anonymous said...

Are these settlements "keep you mouths shut" money?

DPL said...

11:29 I agree a bit of that for sure. If they were all that great, why get rid of them? And of course using our money

Anonymous said...

Severance payments when there is no cause for dismissal are based on the time needed to find a similar job, not how long you worked.