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April 25, 2002
Retirement Incentive and Transition Incentive Benefit Programs offered by Vancouver Coastal Health Authority
Vancouver Coastal Health Authority (VCHA) is offering a Retirement Incentive Benefit program and a Transition Incentive Benefit to minimize layoffs resulting from their plans to restructure and downsize health care delivery. The Health Authority is seeking expressions of interest from employees in receiving payment in exchange for voluntary resignation.
Employment Insurance implications
Receipt of payment under either the retirement or transition incentive programs will prohibit the receipt of Employment Insurance, unless the employer has applied and been approved by Human Resources Development Canada for exemption under Section 51 of the Employment Insurance Act.
Warning: watch out for the waiver!
In order to receive payment from either the retirement or transition incentive programs, each employee will be required by the employer to sign a release that, as currently worded, would result in waiving rights to pursue existing or file future claims under WCB, Human Rights Code, Labour Relations Code and Employment Standards Act.
BCNU has proposed less restrictive wording for the waiver but has not received a response from VCHA.
What could signing the waiver (as currently worded) mean for employees?
The employer might argue:
- that employees have waived their right to pursue pre-existing grievances, human rights complaints, WCB appeals etc.
- that this waiver prevent future claims under WCB that might arise from previous employment
- that this waiver prevents employees addressing disputes over issues related to the actual resignation such as severance pay out and references.
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Contact your BCNU Steward for advice before signing any waiver documents.
The Retirement Incentive program
The program provides the equivalent of 24 weeks pay, in addition to payments under Article 42.11 Cash out of Sick Leave Credits and Article 55 Severance Pay and any other banks referenced in the contract (PIL or Provincially Imposed Language), to regular full time or part time employees who are enrolled in the Municipal or Public Service Pension plans and are already eligible for an unreduced pension.
Regular full time or part time employees who are eligible for a reduced pension would receive 16 weeks pay in addition to payments under Article 42.11 Cash out of Sick Leave Credits and Article 55- Severance Pay and any other banks referenced in the PIL.
Who is eligible for consideration for payment under this program?
- regular employees (full time or part-time), whose resignation would prevent their own or another regular employee’s involuntary layoff
- regular employees with a minimum of 5 years seniority.
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What do employees need to know?
- To receive an unreduced pension the employee will need to meet the criteria set by the Pension Corporation.
- The pension plan rules say that the Employer has an obligation to supply the correct data to the Pension Corporation about each employee’s employment history. The Pension Corporation verifies the pension history and what pension each eligible employee would receive by resigning under the early retirement incentive benefit program.
- The employer has an obligation to ensure that each applicant is provided with all the information from the Pension Corporation describing their pension entitlement before they make a decision to resign.
- Under the pension plan, employees have the right to purchase back service only while still an active contributor to the pension plan. All the reinstatements and purchase of service has to be done before the employee resigns.
- The 16 or 24 weeks retirement incentive benefit could be used to buy back pensionable service, and/or portions can be tax-sheltered in an RRSP. The employer has to supply information and counsel to employees on retiring allowance programs because the employer has to make the proper income tax deductions at source and transfer the funds directly to an RRSP.
- Any employee accepting a benefit under the retirement incentive program will not be able to work for another health sector employer for the equivalent amount of time they receive payment. i.e 16 or 24 weeks. The impact of this limitation on regular employees who might work concurrently as a casual at another work site is not clear.
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The Transition Incentive Benefit program
This program provides transition benefits to employees who agree to voluntarily terminate their employment to prevent their own or another employee’s involuntary layoff.
Regular employees with a minimum of 5 years seniority will receive the equivalent of 8 weeks pay at the applicant’s regular pay and FTE in addition to payments under Article 42.11 Cash out of Sick Leave Credits and Article 55 Severance Pay and any other banks referenced in the PIL.
Regular employees with less than 5 years of seniority will receive pay based on notice set out in Article 15.01 of the PIL.
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