Gratuity Payout

Dear CUPE 5555 member:

I have had many inquiries from members who were hired prior to June 30, 2002 as they recently received a letter from Larry Piccinin, Senior Manager of Human Resource Services, informing them that they can elect to receive, an early payout of their sick leave retirement gratuity. The letters were sent as per the provincial collective agreement language.(see highlighted summary below)

The early gratuity payout is a way for the government to try and save money to offset the minimal wage increase they will be providing over the life of our collective agreement. Our provincial OSBCC committee has strongly advised that no one take the early payout especially if you are under the age of 61 and taking a reduction of more than 2%. Provincial agreement summary of Voluntary Vested Early Gratuity Payout (Offset)

  • Option for members who are eligible for a retirement gratuity to request an early payout
  • Employees 61 or older as of June 30, 2016 can take pay out with a 2% penalty
  • Employees below the age of 61 would incur a penalty of 7.87% per year for each year below the age of 61
  • Eligible employees must declare intention to take payout by June 30th, 2016
  • would be paid on first pay of 2016-2017 school year
  • May be directed to an RRSP or into an OMERS AVC (Additional Voluntary Contributions) account

If you do not take the early pay out, there is no change  in how the gratuity has been paid out in the past and you will receive your full entitlement, without reduction, once you retire to pension (early retirement is included in this). I know that there has been some confusion due to the wording in the letter indicating “normal” retirement date and what that actually meant.

A few years back when the government passed bill 115 and froze our gratuity, we had some members find out that our employer was not going to recognize the fact that they were an employee before June 30, 2002. They deemed them ineligible for gratuity pay out  upon retirement as they were a casual worker at the time. This is not the wording in our collective agreement and grievances were filed.

Since the early payout letters have been sent, it has reminded members about their grievance, making them think that it has been forgotten. This is not the case, and the grievance(s) are with our national union awaiting an arbitration date. I always reference the steps of a grievance like waiting for a court date especially when it gets to the arbitration stage. The minimum wait time that we normally see is greater than a year. I know this is frustrating to all involved, but we are confident in the intent of the language and will be seeing this grievance through to the end. I would also like to ease the minds of the members who are involved in this grievance that even if you retire prior to the arbitration ruling, you will still be entitled to compensation if it goes in our favour. Please feel free to contact me if you have any questions, or need further clarification.

In solidarity,

Ron Maguire

President -CUPE Local 5555 Education Workers of the Kawartha Pine Ridge District School Board


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