Wednesday, June 12, 2013

Health And Postsecondary Education

With respect to the Alberta government’s health file, the past two days have been turbulent.  Yesterday the Minister of Health, Fred Horne, instructed the board of Alberta Health Services (AHS) to cancel bonus payments to its executives.  These bonus payments – called ‘pay at risk’ – involve paying a certain portion of an executive’s salary, but only if the executive has met some performance target.  Apparently, pay at risk is part of the contract of about 100 AHS executives, and for the fiscal year 2012-13 amounts to a total of $3.2M.  Pay at risk will not be included in future contracts.

The AHS board voted to ignore the health minister’s directive.  They defended this decision on two grounds: the sanctity of contracts, and board autonomy.  The AHS viewed itself as functioning at arm’s length from the government.  Horne dismissed the entire AHS board earlier today.

Currently, executive bonuses at AHS are politically ugly.  Some front-line health care workers are losing their jobs, which sets an awkward context for highly paid executives receiving large bonuses.  After the recent (austere) provincial budget, the health minister expressed displeasure with these bonuses, because they were out of step with the budget’s theme of ‘living within our means’.  However, with respect to eliminating pay at risk, “Horne insisted the decision rests with the AHS board, adding: ‘I don’t have the authority to interfere with someone’s contract of employment.’”  Of course, he had the authority to direct the AHS board to interfere with these contracts, as well as the authority to remove the board when they refused.

Regardless of one’s view of pay at risk, it apparently is part of a contractual agreement administered by an arm’s length board.  The government’s action suggests that it has no interest in honouring such agreements, and feels no hesitation about directing arm’s length boards to violate them to keep in step with government policy.  Jen Gerson’s column in the National Post – accompanied by the headline “Don’t Mess With The Boss Lady” – points out that Horne’s action sends a strong message to other arm’s length boards.  What is the message?  Do not defy the government!

What does all of this have to do with Alberta’s postsecondary education system?  Arm’s length boards govern Alberta’s universities and colleges.  Their autonomy became an issue when the Minister of Enterprise and Advanced Education delivered mandate letters to them shortly after the provincial budget.  The same minister later asked all institutions to institute a wage freeze over the next three years.  An obvious concern to anyone employed in postsecondary education is that the government’s approach to AHS and its contracts is the model for upcoming interactions with university boards.

How binding is a university employee’s contract?  How autonomous is a university’s Board of Governors?  We will find answers to these questions in the not-too-distant future.

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