The Provincial Government today announced it has reached collective agreements with 15 bargaining units represented by the Newfoundland and Labrador Association of Public and Private Employees (NAPE). This agreement is for a term of four years, with just over two years remaining. The agreement will expire on March 31, 2020.

The Provincial Government and NAPE, which represents approximately 20,000 public sector employees, worked together to reach a deal that respects the province’s fiscal situation.

These agreements include:

• No wage increases.
• Elimination of severance, which is an earned benefit that has been a financial liability for decades. Through its elimination, employees with at least one year of service will be paid one week to a maximum of 20 weeks.
• Changes to group insurance for new employees. While current employees qualify for retirement benefits such as group health and life insurance after 10 years of service, new hires will have to reach 15 years of service to qualify. Premiums at retirement will be calculated using a sliding scale based on years of service replacing the current 50-50 cost-shared formula at retirement.
• Government has agreed to no mass-layoffs for the term of the agreement as it could have a significant impact on the provincial economy.
• Reduction of the public service through attrition, which has already contributed to a six per cent reduction of employees in government departments.

These collective agreements will support the sustainability of government programs and services while creating a more affordable public service. The current projected savings of the severance payout is approximately $25 million per year. Severance is a taxable income for the recipient and will also help stimulate spending at local businesses. In terms of no wage increases, it should be noted that each one per cent increase in pay would have resulted in an increase of more than $40 million in wage spending annually.

Negotiations are ongoing with other public sector unions in the province.

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“Under this agreement, we are creating greater stability in the public service and overarching economy, while securing no wage increases, changes to group insurance for new employees and eliminating severance, which is a significant financial liability. As we look forward to our negotiations with other public sector unions, our priority will be balancing our fiscal situation while supporting the delivery of services and supporting economic development.”
Honourable Tom Osborne
Minister of Finance and President of Treasury Board
Minister Responsible for the Human Resources Secretariat

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Marc Budgell
Finance
709-729-2477, 689-0430
marcbudgell@gov.nl.ca