Editorial: Enough of scandals and severance

As outrage grows over repeated scandals and incompetence by public officials, governments are compounding the spending problems with what the public believes are outrageous severance packages for fired employees.

Former Toronto Community Housing Corp. CEO Derek Ballantyne, who lost his next job at Build Toronto Inc. following the outcry over inappropriate spending at the TCHC, likely received a generous severance package.

We’ll probably have to do the same for his successor, Keiko Nakamura.
In the meantime, disgraced former federal public sector integrity commissioner Christiane Ouimet received a $534,000 departure package following a scathing audit of her office.

In addition, the province paid out plenty of money in the wake of the eHealth Ontario scandal sparked to some degree, as many people will recall, over a consultant’s billing of $3.99 for Choco Bite treats.

There are many issues at play here. Is it worth it to pay out so much in severance given that there’s not always as much proof of actual money wasted as the hype would have us believe?

Certainly, City of Toronto auditor general Jeff Griffiths was right to criticize the TCHC for inappropriately spending money on things like Holt Renfrew chocolates and shoddy procurement activities.

But in his conclusions in one of his reports, he noted that taking action on employee expenses would save $200,000 a year. On procurement, he said savings of $4 million to $10 million “may be possible.”

The public outrage is certainly legitimate. But if that’s the case, why are we paying out so much to the people who let the problems happen in the first place? Contract law is the quick answer. Fired executives could sue, so settling the matter by paying severance is an easy solution.

But there’s an inherent inequality involved here as executives get generous severance packages under common law while a fast-food employee fired for something as simple as showing up late a few times likely falls under the comparatively meagre provisions of the Employment Standards Act.

Why do public-sector executives who screw up get so much while others get so little?
Certainly, executives’ bargaining power to negotiate generous termination provisions is key.

But given the unsatisfactory result of watching people who mess up receive big severance packages, perhaps it’s time to consider alternatives.

In particular, we should judge every public dismissal on its own merits, rather than according to media hype and the views of gravy-seeking politicians like Toronto Mayor Rob Ford.

It was wrong to spend money on Holt Renfrew treats, but did TCHC executives otherwise do a good job, particularly through the agency’s landmark remake of Regent Park? If their actions were so bad to meet the very high standard for firing them with cause, then let them go with no severance.

If that’s not legally justifiable, issue warnings to executives, discipline them, and take the auditor’s report as a learning opportunity for all public agencies and a chance to revamp and enforce the spending rules.

It’s hard to get around laws and contracts, but scapegoating public employees over chocolates and brownies while paying them anyway isn’t fiscally responsible either.

At the very least, if we truly believe there’s so much gravy out there, maybe it’s not worth it for governments to accept employees’ demands for generous termination clauses in their contracts.

Until we deal with the broader spending issues, maybe they should get the same termination treatment as fast-food employees. There’s some gravy for Ford to deal with.
- Glenn Kauth

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