Government “Meddling” with Auditors’ Contract

Fee reimbursement may violate wage restraint

by Gordon Sova (gordon.sova@thomsonreuters.com)

The auditors and other professionals employed by the Canada Revenue Agency and represented by the Professional Institute of the Public Service of Canada recently ratified a new collective agreement. It followed the government’s prescribed pattern for wage increases. But, it also extended the groups for whom the CRA would pay professional fees. Up until then, annual memberships in the accounting bodies (CICA, CGA and CMA) had been reimbursed. In this round of negotiations, that was broadened to other professional organizations, such as provincial bar associations. So far, not so special. Lots of employers who are not law firms, mine for instance, reimburse lawyers’ annual fees.

However, Treasury Board is of the opinion that the increase in costs resulting from the CRA’s largesse is a violation of the Expenditure Restraint Act. It is going to the Federal Court to have it over-ruled. Two other PIPSC contracts awarded by interest arbitration have also been challenged for similar reasons.

A couple of years ago I reported on a public sector agreement in a province that had wage restraint. The agreement had been structured in such a way as to avoid the wage increase limits. The union said so on its web site and, dutifully but naively, I reported it. I got a phone call from a member of management who was not at all happy that that aspect of the agreement was being made public.

And there are a lot of ways to increase pay without resorting to a general wage increase. The best example is the wage progression: higher steps can be added or lower ones taken away. As well, premium pay, overtime, allowances and job evaluations can all be adjusted in such a way as to benefit employees.

On the one hand, as a supporter of democracy, I believe that the will of Parliament must be supreme and should not be undermined by the civil servants charged with carrying it out. However, I also have to ask whether it always makes good labour relations sense.

The management of the CRA is responsible for attracting and retaining the talent they need to fulfill its mandate. Lawyers and accountants have other employment options. And, even if they don’t leave, their morale will not be improved by having this perk offered and then taken away. Management is also responsible for having employees motivated to do their jobs to the best of their abilities. Finding tax cheats can bring in big money.

If this infraction had been identified a couple of weeks earlier, it could have been dealt with before either party was embarrassed. But, because of organizational structure and pure size, the “loop” in the public service is usually much larger than it is in the private sector.

As long as the government in power is going to interpret its mandate as strictly is it seems to be doing here, negotiators will have one hand tied behind their backs. There is no indication that the CRA or the union had any intention of flouting wage restraint, yet they may find their deal invalid. Do they disappoint some members of the bargaining unit by reversing the fee reimbursement or do they disappoint even more of them by reducing the general wage increase by the (likely very tiny) amount needed to conform to the law?