Over a year and a half ago, the United Conservative government announced that it was going to privatize lab testing services in Alberta. This announcement came after months of lobbying by people who had donated over $100,000 to the UCP or its predecessor parties.
The company it was selling the public services (Alberta Public Laboratories) to was DynaLIFE, which had already been providing community lab services in the capital region, as well as in parts of northern and central Alberta, since April 2021. The contract was a 14-year deal, with an option to extend for an additional 10 years.
Health Sciences Association of Alberta, the union that represents lab workers, emailed their membership this week regarding a recent decision from the Alberta Labour Relations Board regarding the transition of this purchase.
In that email, Mike Parker, HSAA president, and Leanne Alfaro, HSAA vice president, indicated that as part of the transition, they were promised that their collective agreement would be honoured.
When it was announced DynaLIFE would be taking over community lab services, both the company and the current government said our members would be kept whole when it came to our collective bargaining agreement – including pensions.
However, during the transition process, according to the email, DynaLIFE decided that this wasn’t practical for their business model, at least as far as pensions go.
Once we engaged in the transition process, it became clear DynaLIFE had no intention of keeping its word. The company recently asked the ALRB to intervene and hear its case that it couldn’t provide the pensions members are entitled to and we have bargained for because pensions are “not a fit”, “unsuitable” and “impossible” for a private, for-profit company.
According to the ALRB ruling published earlier this week, DynaLIFE wanted to change pensions not just for HSAA workers who used to work at APL, but also for the workers who were drivers for APL and were represented by the Canadian Union of public employees.
In the background information of the ruling, we discover that HSAA and CUPE were using different pension plans for their members, and DynaLIFE was finding it too complicated. Instead they applied to the ALRB to allow them to amend the the collective agreements so that the HSAA and CUPE workers would move over to its group registered retirement savings plan.
Some of the transferred employees were participating in the Local Authorities Pension Plan and some were participating in the old Calgary Lab Services (a predecessor to APL) Defined Contribution Pension Plan. DynaLIFE does not participate in LAPP, nor offer a DCPP, but offers its employees the option to participate in a Group Registered Retirement Savings Plan. As discussed below, DynaLIFE argues it is either ineligible to be a LAPP employer or that LAPP is unsuitable.
DynaLIFE asks the Board to exercise its discretion under section 46(2) of the Code to declare and order that the HSAA/APL and CUPE/APL collective agreements apply to the respective transferred employees except that the Pension Plan articles of those collective agreements be amended and replaced with the Group RRSP Plan article from the HSAA/DynaLIFE collective agreement.
Here is section 46(2) of the Labour Relations Code.
Where a question arises under this section, the Board, on the application of any employer, trade union or person affected, may determine what rights, privileges and duties have been acquired or retained and the Board may, for that purpose, make any inquiries and direct the taking of any votes that it considers necessary and decide any questions arising under this section
Naturally, both HSAA and CUPE weren’t too keen on that development and opposed that aspect of DynaLIFE’s successorship application.
The ALRB heard the application twice last month and then a third time last Thursday. The ALRB panel—which included ALRBE vice-chair Jeremy Schick and members Brygeda Renke and Rod Schenk—heard testimony from 5 witness, including 2 expert witnesses.
The witnesses included Jason Pincock, CEO of DynaLIFE; Chris Bradshaw, a labour relations officer with HSAA; Rory Gill, president of CUPE Alberta; Shauna Blackburn-Cook, an employee benefits consultant with Nakamun Group Employee Benefits Inc., who was retained by DynaLIFE; and Navaz Cassam, the president and chief actuary of Gordon B. Lang & Associates Inc., who was retained by HSAA.
Ultimately, the board turned down DynaLIFE’s request, claiming that DynaLife lacked definitive evidence that the pension terms in the existing collective agreements were impossible. It also said that DynaLIFE couldn’t couldn’t convince them that LAPP wasn’t suitable for a private, for-profit employer.
The Board declines to exercise its discretion under section 46(2) as requested by DynaLIFE: the Board has no definitive evidence the pension terms of the collective agreements are impossible, nor is it satisfied it should exercise its discretion on the basis LAPP is “unsuitable” for a private, for-profit, employer.
There were a few details that emerged in the ruling that I found interesting.
For example, Pincock claimed that DynaLIFE wouldn’t qualify for as an LAPP employer because they are a private company, and there is only one private company participating in the pension plan. However, during cross-examination, Pincock admitted that DynaLIFE hadn’t even reached out to LAPP to see if they’d qualify.
As well, the ALRB said in their ruling that DynaLIFE knew what they were getting themselves into when they took on the contract, which included a unionized workforce.
Successor employers go into transactions such as this with their eyes open as to the existence of collective agreements and pension obligations. Where they are successors under section 46 of the Code to a business or undertaking of a public sector employer, section 46(1) makes clear those collective agreements bind them “as if the collective agreement had been signed by that person”.
Finally, another thing I noticed is that when workers retired, they’d have less retirement income under DynaLIFE’s group RRSP than they would under the current LAPP they’re enrolled in.
Under LAPP, according to Blackburn-Cook, a worker with 35 years of service, they’d get anywhere from 40–49% of their income. When you add in Canada Pension Plan and Old Age Security, total income replacement would jump to 94% of their employment income.
Under DynaLIFE’s RRSP, however, workers would receive 39% of their employment income, and that increases to 79–86% when you add in CPP and OAS. And even then, because the RRSP actual benefit is unknown, this projection is based on a lot of assumptions, and may end up being higher or lower.
Plus, under LAPP, the employer contribution is 26%, but under the RRSP, it’s only 23%.
No wonder HSAA and CUPE opposed the switch.