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EI clawback hitting health workers is legal, but not fair, prof says

Oct 07 2012

The clawback of millions of dollars paid to 2,200 workers fired when B.C. contracted out hospital jobs in 2002 may be legal, but it's not fair - and the province should own up to it, says a Royal Roads professor.

Terry Power, who teaches business and also holds a law degree, argues the province should "do the right thing" and cover the thousands of dollars apiece that many former employees must repay to Ottawa.

The clawbacks involve only workers who received federal employment insurance benefits after the province privatized their jobs.

"Many will be driven into bankruptcy by it," Power predicted, adding that housekeepers and cleaners should not be on the hook for the agreement's shortcomings in protecting them from such an eventuality.

Former hospital housekeeper Andrea Rachel now faces paying back $8,191 of her $14,578 EI overpayment.

That decision has been upheld by both a panel of referees and an umpire, and related judgments could affect about 2,200 other members of the Hospital Employees' Union - even though the referees noted the Employment Insurance Commission would "sully its reputation" by collecting such sums from ordinary people who would suffer "undue hardship" through no fault of their own.

The payments were made in 2009 and 2010, in the wake of a Supreme Court of Canada ruling in 2007 that the B.C. Liberals' Bill 29 violated the union workers' constitutional right to freedom of association.

The legislation broke contracts that paid unionized workers up to $17 an hour, and those subsequently hired by a private company were paid about $10 an hour.

The EI commission says the payments - $68 million was to go to 9,000 former union members terminated by the legislation - were earned income and therefore liable for clawback as overpayments of EI benefits.

The union contends the payments were awards for the violation of workers' constitutional rights.

Power stressed he does not see a legal onus for the province to reimburse the workers, and said that he believes the law and the clawback are technically and legally correct.

But on the basis of equitable corporate responsibility, "it's fair to say that they should step forward and do the right thing ... Because this really is a legitimate obligation, initially, of the province."

The province did attempt to clarify the situation just before the 2009 election.

The deputy minister to then-premier Gordon Campbell wrote to her federal counterpart at Human Resources and Skills Development saying that the provincial government viewed the payments as made in its role as legislator, not as employer.

HEU spokesman Mike Old said the letter was sent to aid the case that the union was trying to make that the payments should not be considered employment earnings.

The health authorities distributed the money from government.

"The union didn't have control over how the money was issued, which was why the letter was important," Old said.


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