An arbitrator has ruled in favour of the Winnipeg Police Association in its dispute with the City of Winnipeg over the police pension plan.
The association filed the grievance in November 2019 after the City attempted to make alterations to the defined benefit pension plan. The changes included increasing employee contributions from eight per cent to 11.5 per cent and reducing employer contributions from 18.48 per cent to 11.5 per cent, both over a five-year time frame.
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“I conclude that the agreement requires that changes to the pension plan cannot be by unilateral action of the City and must be negotiated by the parties,” wrote arbitrator Michael Werier in his decision.
The arbitrator has awarded the association $40,000 in damages and an additional $400 for each of its more than 1,300 members.
Among its proposed changes, the City had also suggested excluding overtime hours from pensionable earnings and changing the plan’s early retirement provisions to include a pension reduction if members retired before age 55 — or age 60 if their service with the City was less than 20 years. It also wanted to eliminate the plan’s bridge benefit, which is payable to members between retirement and age 65, for any service after Jan. 1, 2020.
If the City had been successful in arbitration, the changes were set to take effect on April 1, 2020.
In a press release at the time, the City said the changes could save Winnipeg approximately $12 million annually.
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The City told the arbitrator it had the right to make changes to the pension plan, since it’s governed by a city bylaw. But the WPA argued the plan has always been negotiated under its collective bargaining agreement and the City had no right to make unilateral changes, pointing to 40 years of bargaining history that has included the pension plan.
In his decision, Werier said the collective agreement doesn’t include language providing the City with the right to make changes on its own. In fact, it includes wording that shows “negotiations” and “agreement” are the methods to make future changes.
As well, he accepted the association’s submission around decades of bargaining history. “Why did the City, in years of negotiations, negotiate with the union to obtain its consent if they could make unilateral changes to the plan? The reason is that they felt they didn’t have the right to make these changes.”
Maurice Sabourin, president of the WPA, called the decision a “huge win” for the association and its members. He notes the association’s history of bargaining with the City includes years where the City faced challenging economics, in which police officers didn’t receive pay raises or benefits increases, so they negotiated for better pension benefits instead.
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“When the City decided they were going to make unilateral changes and take all that away, obviously there were big concerns for members going into the future, but what about everything in the past that we had given up for better pension benefits?” he says. “The unfortunate thing is the City tried to vilify the police association and its members by calling us greedy, saying we have a gold-plated pension. I wouldn’t disagree that we have a very good pension, but that is because we’ve given up other benefits in the past. And it’s always been negotiated.”
Sabourin notes the city is now on the hook for nearly $600,000 in damages. “We warned the City in writing on numerous occasions: ‘You can’t do this, we have a legal opinion and your challenge is only going to cause the City to be in a worse financial position because we are going to be asking for damages.’ They kept going on their path and, unfortunately for them, the arbitrator found in our favour.”
In a statement to Benefits Canada, the City said it respected Weirer’s decision, but was disappointed in the outcome. “We are reviewing the reasons outlined in the award and will be considering all options available to us.”
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