Compensation Disclosure Regulation (Sunshine List)

by Faculty Association | Filed under May 2016.

Below is the text of the letter Association President, Sandra Hoenle, sent to the Alberta Government on March 2, 2016 in response to their consultations on the Compensation Disclosure Regulation (commonly known as the Sunshine List). We also encourage academic staff members to contact their MLA with any concerns about the Regulation.

 

Dear Sir or Madam:

Re:  Compensation Disclosure Regulation (Sunshine List)

On behalf of the Faculty Association of the University of Calgary, we would like to share our comments below related to the Compensation Disclosure Regulation. While our first comments relate to the regulation, I appreciate that some of our follow up comments may relate more to matters of the Act.  It is difficult to navigate the interface between the two.

It was disappointing that the Government chose not to consult with stakeholders before establishing the Public Sector Compensation Transparency Act, as many of the problems are inherent in the Act.  We believe that the aims of the Act could have been achieved in ways that will be far less damaging than the result that will occur.  Such unintended consequences can occur when appropriate consultations do not happen.  We would strongly encourage the government to consult with stakeholders on such matters in the future.  Indeed, the one week’s notice we received on this consultation regarding regulations was extraordinarily short.

The primary concern regarding the regulations arises with the matter of severance.  In relation to members represented by the Faculty Association, severance primarily occurs as part of an agreement we make with the employer to resolve a conflict of some sort.  It is often a face-saving way of helping a person move on to another employment opportunity.  The difficulty we would have in seeing severance reported is that the idea of this being “face-saving” will be turned on its head.  Rather than resolving a conflict, it would create a new one since attention would be drawn to the person as having received a “package”.  This will likely lead to a change in the nature of such deals, to being a continuation of salary – that is, we will likely be forced to negotiate deals which provide for the departing member to get six months of salary rather than a lump sum payment, since this would not draw attention to their situation.  This may create further consequences, as it means the employer will be on the hook for benefits, and there may be problems with overlapping employment.  My fear is that rather than any of this, the disclosure of severance either as a lump sum or salary will lead the member to instead want the Faculty Association to proceed with the battle against the University Administration.  This will lead to increased costs to both the institution and the Faculty Association simply because the face-saving option is being removed from us.  Our belief is that the intent of the legislation was to show severance packages for senior executives, or where there were discretionary “gifts”.  Our recommendation is that severance not be disclosed in the situation where the matter is negotiated between a union (or Faculty Association) and the employer, as this is an inappropriate impediment to the conflict resolution process.  However, as that may not be possible under the current Act, a less palatable option would be to report any severance as salary rather than separately reporting severance, to allow some amount of face-saving in this situation rather than a glowing red flag of “severance”.

One of our difficulties with the way disclosure of salary will work is that it will allow individuals to compare increases between years and figure out what salary increments the individual will be given.  Unlike other unionized environments where salaries are on a grid, the Universities tend to use an assessed merit pay system.  This means that by comparing two years of salary information, an outsider can determine the relative assessment of the academic staff member’s performance.  This is a significant disclosure of personal information that was not anticipated in the Act.  In other words, the comparative assessment of all academic staff above the reporting threshold will now be fully disclosed.  Aside from disclosing personal information, this will also create internal competition as members who have competed internally for such merit increments will have access to the information about their colleagues. (The Freedom of Information and Protection of Privacy Act prohibits such disclosure, so presumably the increments for everyone below the threshold will continue to be held secret.)  This unequal playing field of disclosure/non-disclosure will also create conflicts within our merit assessment system.  Further, the U of A and U of C have a “zero increment” assessment which is a trigger for discipline.  So, by comparing two years of salary data, an outsider observer may also be able to determine which academic staff members have been disciplined.  Again, there would have been far better ways that the legislation could have met the interest of disclosing salary information without disclosing all assessments and discipline (for example, through the use of salary cohorts).  My fear is that this will needlessly create significant conflict and embarrassment.  If the reporting requirement listed compensation by $10,000 increments rather than to the dollar, this would go a long way to minimize the disclosure.  If such a reporting method is permitted by regulation, it may be of significant benefit to reduce unwanted conflicts and disclosure of sensitive personal information.

One of the reasons that the ‘sunshine list’ is of particular significance to University academic staff is that approximately half of our membership will be affected by this disclosure.  This is far more than most other organized workforces.  Thus the impact is not just on the elite few, but on the bulk of our membership.  (Salaries for ongoing academic staff at the University of Calgary range from $65,000 to over $300,000, with a median salary of approximately $123,000.)  Academic staff have higher than average incomes due to their significant education and the relatively late start to their careers.  Academics tend to get their first ‘permanent’ job in their late thirties or early forties.  Eighty-five percent of the ongoing academic staff at the University of Calgary are 40 or over.  What this points to is that the academic work force is a significantly different animal than other workforces.  The ‘sunshine list’ does not provide this context and arguably distorts the employment reality of academic staff.  In this context, the sunshine list could be seen as populist attack on professionals and anti-intellectual.  While that was not the intent, it is the impact.  Again, the interests of the legislature could have been fulfilled in better, more progressive, ways by focusing on the top 10% of the relevant workforce, rather than half of our membership.

Universities are interesting as public bodies, since unlike school boards, hospitals, and the like, only a portion of their income is derived from the provincial government.  In the case of the University of Calgary it is about 50% of the budget.  Many corporations receive significant funding from the public purse, but are not subjected to these same rules.  If the government is truly interested in creating a level playing field all organizations which receive government grants or receive tax breaks should be subject to the same standard of reporting.

I appreciate that not all of the items above will be relevant in the regulatory review.  For that reason, I have copied the Minister of Justice and Solicitor General, as well as the Minister of Advance Education on this submission.  Where this submission goes beyond regulatory matters, I hope the Ministers will consider this a request for appropriate legislative change.

Thank you in advance for your thoughtful consideration of this submission.

Sincerely,

Dr. Sandra Hoenle
President


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