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Hospital workers fight clawback of employment insurance money

More than 2,000 members of the Hospital Employees’ Union will have to wait as long as three months to learn whether some of them will be able to keep money they received from the province several years after B.C. gutted labour contracts in 2002.
Michael Burling expects to pay back $6,800 of $8,200: ñHumanity doesnÍt come into their decision.î

More than 2,000 members of the Hospital Employees’ Union will have to wait as long as three months to learn whether some of them will be able to keep money they received from the province several years after B.C. gutted labour contracts in 2002.

The union hopes to meet with the Employment Insurance Board of Referees in February or March to argue there was too long a delay between workers collecting EI in the wake of their firings and the federal government’s demand for repayment of benefits, which came up to five years later.

“This is like an axe hanging over our heads,” said Victoria resident Michael Burling, 61, who now works at a B.C. Liquor Store. “I’m just a working guy.”

It would take most of Burling’s savings to pay back $6,800 of the $8,200 he received. That money came from a $68-million payment the province made to former unionized health workers. Burling, who received 30 weeks of EI payments, had spent 30 years as a hospital worker — the last 12 as a housekeeper in the psycho-dementia ward at Royal Jubilee Hospital.

The Employment Insurance Commission views the provincial settlement amount as undeclared income and part of the original severance pay — even though it was received years later — which pushed back when EI payments could begin; the union argues it was compensation for a serious violation of workers’ constitutional rights.

B.C.’s Bill 29 allowed the province to privatize 9,000 mostly hospital-based jobs, but in 2007, the Supreme Court of Canada struck down parts of the bill.

Workers targeted by the bill generally made about $18.50 an hour, said HEU communications officer Patty Gibson.

The hearing in February or March will be the union’s last chance to prevent a clawback of thousands of dollars apiece for many of the 2,200 union members who collected EI after they lost their jobs.

The union plans to argue that the clawback period was too long and affected more people than it should have, Gibson said.

Individuals were laid off under Bill 29 in 2003 and 2004, but the settlement of $68 million from the province was not reached until 2008, following the Supreme Court decision.

The money was paid to ex-union members in 2009 and 2010, and the request for repayments began in 2010.

Terry Power, a Royal Roads professor of business, has called the clawback legal but unfair, and said the province still has a “legitimate obligation” to take the burden from ordinary workers.

In March 2010, the Board of Referees — which hears EI appeals — upheld repayment of the EI benefits, but suggested the Employment Insurance Commission not collect on the grounds of “undue hardship,” going so far as to say that doing so would “sully the reputation of the commission.”

Two years ago, the Canada Revenue Agency began sending out form letters asking for repayment and advising interest would accrue, but no collections are expected pending all appeals.

Burling filed a hardship declaration with the revenue agency but received a form-letter rejection that “didn’t give any real reason,” he said. Thus far, the request for payment is in abeyance.

“I would have done better going on welfare,” he said — since he would have received a $17,000 allocation from the settlement fund and would not be asked to pay money back. “Somebody should do the right thing. Unfortunately, whether it’s legal or not, it’s morally wrong.”

The union does not have figures on how many former members filed hardship claims directly to the revenue agency, which said it would decide them on a case-by-case basis.

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January 2002: The B.C. government passes Bill 29, which allows employers to set aside collective agreements and contract out to private companies most health-care services except clinical hospital bedside services.

2003-2004: Health-care workers are laid off. Some apply for and receive Employment Insurance benefits.

2007: Supreme Court of Canada strikes down part of Bill 29 and rules the workers’ right to freedom of association was violated.

2009: The B.C. government and unions reach a $68-million settlement, to be paid to workers who were laid off.

2009-2010: Laid-off workers receive settlement payments.

2010: Requests for repayment of EI benefits begin. The former workers are told the settlement payments are considered undeclared income from the year they were laid off. The money pushed back the date when laid-off workers became eligible for EI.

March 2010: The Employment Insurance Board of Referees upholds the demand for repayment of EI benefits, but suggests that they not be collected on the grounds of “undue hardship.”