Proceedings of the Standing Senate Committee on
Internal Economy,
Budgets and Administration
Issue 5 - Eighth and Ninth Reports of the Committee
THURSDAY, June 13, 1996
The Standing Committee on Internal Economy, Budgets and Administration has the honour to present its
EIGHTH REPORT
Your Committee has examined and approved the following budgets presented to it by the Standing Senate Committee on Fisheries and the Standing Senate Committee Foreign Affairs for the proposed expenditures of the said Committees for the fiscal year ending March 31, 1997:
Standing Senate Committee on Fisheries
Professional and Special Services $12,000
Witnesses Expenses 6,000
All Other Expenditures 500
TOTAL $18,500
Standing Senate Committee on Foreign Affairs
Professional and Other Services $ 7,900
Transport and Communications 9,964
Witness Expenses 8,000
Courier Services 100
All Other Expenditures 1,200
TOTAL $27,164
Respectfully submitted,
COLIN KENNY
Chair
THURSDAY, June 13, 1996
The Standing Committee on Internal Economy, Budgets and Administration has the honour to present its
NINTH REPORT
Your Committee has examined a proposal to extend benefits and entitlements to individuals that are now on contract with Senators.
The research function in the Senate has grown significantly since 1988 when the Guidelines for Research Expenditures were approved by the Committee on Internal Economy, Budgets and Administration. There is now a requirement for researchers to meet the needs of Senators on a more continuous basis and in closer proximity to the workplace. As such, the Senate could be at risk of having an employer-employee relationship claimed by contractuals and be seen as not being a good employer. It is therefore not surprising that the issue of extending benefits to this group of individuals on contract be a focus of interest amongst many Senators. As discussed on April 25, 1996, this issue should be given a priority before the coming session and brought forward as soon as possible.
In accordance with the Senate Guidelines for Research Expenditures approved by the Committee on Internal Economy, Budgets and Administration April 28, 1988, "a contractor will not be an employee of the Senate or the Senator. Accordingly, payroll deductions at source will not be made and employee benefits are not available." At this time, Senators are entitled to one Secretary at $38,777 (Salary Budget - I) and $50,000 (Senators' Office Expenses - II). Contracts can be established to meet short or longer term needs.
Employee benefits are calculated at 14.5 per cent of the Senate Administration's salary envelope (17 million) or approximately $5,000 per employee, per year.
Currently, for persons hired on contract by Senators, the use of Senate equipment, premises, etc. is very common and could lead to an interpretation that they are "employees" under the terms of PESRA. Should such a case be made, persons hired under contract would be entitled to the same benefits and entitlements normally granted to "employees"; costs could then be very substantial.
A proposed solution to this problem is that three categories of employment could be implemented:
Category 1 (Contracts for short periods of time)
Senators could continue to enter into contracts for short-periods of time, i.e. speech writing (specified task, specified fee, specified time frame) paid through Senators' Office Expenses (II). This would not increase Senate expenses as no deductions at source, no benefit or entitlement can currently be extended to contractuals.
However, attention must be given to avoid an employer- employee relationship being established.
Category 2 (Term for less than six months)
Senators could request that Human Resources hire, on their behalf, an individual on a temporary basis (term) for a period of up to, but not exceeding six months.
This individual would not become an "employee" but would be subject to deductions at source, would be entitled to a record of employment and would be eligible to receive unemployment insurance benefits. Implementation of this option would result in an increase in the Senate's share of employee benefits (C/QPP and UIC contributions). This would be funded through the employee benefit plan and would represent approximately 5 per cent of the total salary cost for this group.
Category 3 (Term for more than six months)
Senators could request that Human Resources hire an individual for a temporary period of over six months. These persons would be deemed to be "employees" with all benefits and entitlements attached thereto. The Senate would then have to assume its share of employee benefits for this new group of employees. For example, between April 1, 1994 and March 31, 1995, 53 contracts were entered into for a period of six months or more and of the 53, 35 were for amounts of at least $30,000. If these 35 only were considered employees and the Senate was required to pay their benefits, this would represent an increase of approximately $136,500 annually to the Senate's share of the employee benefit plan.
Senators could continue to avail themselves of category 1 within the limits prescribed in the Guidelines for Research Expenditures.
Categories 2 and 3 would allow Senators to choose from the full extent of possible options to meet their requirements.
Benefits would be granted to individuals under categories 2 and 3 and would be funded from the Senate Statutory Vote.
Your committee therefore recommends that:
The Guidelines for Research Expenditures be amended to implement categories 2 and 3. These modifications would apply solely to Research contracts in Senators' offices.
Establishing category 2 and 3 would result in an increase in expenditures for employee benefits. However since the Employee Benefits Plan is funded through a statutory vote, this increase will have no impact on the Senate's Operational Budget. Funding for any additional expenditures will automatically be provided by Treasury Board, for this fiscal year. However, for the 1997-1998 fiscal year, the Senate will have to budget for this increase.
These changes will come into effect on the date of the adoption of this report. Employment under all three categories will terminate at the end of the fiscal year.
Respectfully submitted,
COLIN KENNY
Chair