HomeMy WebLinkAboutCOD-009-13 ClaFftWIl REPORT
CORPORATE SERVICES DEPARTMENT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: April 8, 2013 Resolution#: 1-1 By-law#:
Report#: COD-009-13 File#:
Subject: SUMMARY OF SICK TIME BENEFIT FOR FULL TIME MUNICIPAL
EMPLOYEES
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report COD-009-13 be received for information.
Submitted b Reviewed by: t'
Marie Marano, H.B.Sc Franklin Wu,
Director of Corporate Chief Administrative Officer
Services/Human
Resources
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379
REPORT NO.: COD-009-13 PAGE 2
1.0 BACKGROUND
At the March 4, 2013 Council meeting, Council approved the following Resolution
#GPA-163-13:
THAT staff be directed to prepare a report regarding "payment in lieu of
sick days" for all staff, including the accumulated liability of sick day
payments for the Fire Services Department; and
THAT the report be brought back to the General Purpose and
Administration Committee within a month.
2.0 PLAN FOR CUPE AND NON-AFFILIATED STAFF:
2.1 The Municipality negotiated the current sick plan benefit with CUPE in 1993. In
lieu of eliminating sick days accumulating, the Municipality provides for 100% pay
for the first ten (10) days of illness per year with subsequent days paid at 75%, to
a maximum of 85 working days per illness annually, at which point Long Term
Disability would be applicable. The Municipality outsources LTD coverage.
2.2 This plan was negotiated with CUPE and was also made mandatory for all Non-
affiliated staff. It provides for an improved form of income replacement for illness
and to relieve the Municipality of the long term liability associated with sick day
accumulation (also referred to as banking) and payout upon retirement.
2.3 The self insured Short-term Sick Leave Plan has always been administered in
house thereby eliminating premium costs for an external provider and benefit
administrator. The self administered plan has led to effective attendance
management. Employees not taking any sick days throughout a full calendar
year of employment will receive four (4) days pay or take vacation-in-lieu. The
amount of annual sick payout fluctuates from year to year depending on the
number of employees achieving perfect attendance. For this reason, the amount
is not budgeted for and the amount is charged to the salary account of the
affected departments.
Year Number of Number of Staff Sick Payout (paid in
Eligible Staff with Perfect following year)
(COPE & Non Attendance
Affiliated)
2012 235 40 $55,695
2011 230 63 $79,694
REPORT NO.: COD-009-13 PAGE 3
3.0 ACCUMULATED LIABILITY OF SICK DAY PAYMENTS
3.1 The only group of employees that still maintain the sick day accumulation
belongs to the members of the Professional Firefighters' Association. There are
three (3) plans available to this group of 59 employees, subject to an employee's
date of hire. Each plan has been negotiated in previous years with the
Firefighters' Association and therefore are guaranteed under the current
collective agreement with the Firefighters' Association.
3.2 The first plan, for employees hired before January 1, 2004 provides for twelve
(12) sick days per year. Unused sick days may accumulate to a maximum of 182
days. Upon resignation or retirement employees receive a payout equal to one-
half of the unused accumulated days (maximum accumulation is 182 days) at
their rate of pay at the time of termination or retirement. The maximum payout is
one half year's salary.
3.3 The second plan, for employees hired after January 1, 2004 also provides twelve
(12) sick days per year with unused accumulated sick days banked. After five
years of employment, employees with accumulated sick days in excess of 40
receive an annual payout equal to one-half of the number of days in excess of
40. Upon resignation or retirement exactly one-half of remaining unused
accumulated sick days shall be paid at current rate of pay to a maximum of 20
days. The maximum lifetime payout is 91 days, paid out over several years.
3.4 The third plan, available to employees hired after January 1, 2004, is the short-
term disability plan providing for 100% pay for the first five (5) days of illness per
year and 75% of wages for the remaining days, for a total of 120 calendar days
or 56 shifts, until Long Term Disability would be applicable. With the exception of
the number of sick days paid at 100% this plan is identical to the sick plan
negotiated and provided to COPE and Non-Affiliated staff and therefore is not
subject to accumulation and payout upon resignation or retirement. To date, no
employee within this group has enrolled in this plan.
4.0 Liability
4.1 Sick plans that allow for the accumulation of days with the provision for payout
create a significant financial liability for the employer as days accumulated in
previous years are paid out at significantly higher rates of pay when an employee
retires or resigns. The Municipality has repeatedly attempted to negotiate the
REPORT NO.: COD-009-13 PAGE 4
removal of the accumulated sick plans with the Fire Association. Each attempt
has been rejected.
4.2 For the purpose of disclosure requirements under PSAB 3250 and PSAB 3255
(financial accounting obligations as required by Public Sector Accounting Board)
Mercer has determined that as at December 31, 2011 the accrued benefit
obligation for the Fire Association's sick plan is $907,155. The Director of
Finance advised that the Municipality has not set aside any fund in any past or
current budget to offset the obligation. The obligation is offset by actuarial losses
determined through the annual actuarial update resulting in a net accrued benefit
liability at December 31, 2011 of$907,155. for the Fire sick leave. 2012 year
end financial statements have not yet been finalized.
5.0 CONCURRENCE - Not applicable
CONFORMITY WITH STRATEGIC PLAN — Not Applicable
Staff Contact:
Jackie Forsey, Compensation and Benefits Supervisor
Lisa Wheller, Human Resources Supervisor