Hydro hopes 'voluntary departure' package will spur employee exodus, save money

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Hydro shutters 12 offices in southern Manitoba

Manitoba Hydro employees will have a chance to take a payout and walk off the job starting next week as the Crown corporation's "voluntarily departure program" gets underway in a cost-saving effort to shrink its workforce.

"Reducing our costs is important but maintaining safe, reliable service to our customers remains paramount," Hydro president and CEO Kelvin Shepherd said in a statement on Thursday. "It's fair to our employees, providing a financial incentive to those who choose to voluntarily leave the company."

Shepherd provided more details last month about a plan to shrink the workforce by 900 positions and potentially save $60 million to $65 million. If reached, the target would eliminate 15 per cent of Hydro's overall workforce of 6,200.

Hydro's debt as of October 2015 was pegged at $13 billion but could grow to $25 billion over the next three years.

The first signs of a major cut to the overall workforce surfaced last fall following a review of Hydro's books that diagnosed "a serious deterioration in the corporation's financial health."

The voluntary departure package will be offered starting Monday and will be on the table for six weeks. The majority of employees are eligible to apply and will receive two weeks salary for each year of service, up to a maximum of 30 weeks.

Manitoba Hydro is the province's third-largest employer. It cut its executive base by 30 per cent in February following a management restructuring review, again, to save on costs. 

Manitoba Hydro spokesperson Bruce Owen said 10 more managers will leave the company, including eight who will leave this week and two others who will remain on staff until the end of the year.

Hydro hopes to increase its rates by 10 per cent to get it out of the red. The utility delivers hydroelectricity to more than 560,000 Manitoba customers and natural gas to another 276,000.

"To build a stronger, financially stable, more customer-focused Manitoba Hydro, we will need to continue to have a strong base of skilled and talented employees to run the business and serve our customers, and I am confident that this voluntary departure program is one way to help us achieve that goal," Shepherd said.

'Great amount of trepidation'

But Chris Mravinec, president of CUPE Local 998, said if Hydro doesn't reach its target of 900 voluntary departures it will start cutting on its own.

"If it's not achieved voluntarily, the company let us know that they would declare positions redundant and possibly move to layoffs," Mravinec said. "So that's a great amount of uncertainty, it takes people off their game on the job."

The union represents about 1,100 "behind the scenes workers" who could be impacted by Hydro's cuts.

"There's a great amount of trepidation leading up to this," Mravinec said. "Not knowing is the worst thing for people.

"We don't know where the 900 staff will come from. In fact, we don't even know if 900 is a real number. We haven't seen any reports or indications that this is a number that we have to get to. It seems to be an arbitrary number selected by Hydro."

'Anxiously waiting' on program details

Mike Velie, general manager of IBEW Local 2034, said he is "anxiously waiting" on more details about the severance package.

The union represents about 2,700 Manitoba Hydro employees, many of whom work on projects in northern Manitoba.​

Velie said the union has provided input along the way as Hydro officials crafted the nuts and bolts of the departure program, but they have yet to see the final offer.

"We saw this coming," Velie said. "We've asked for our members to be treated fairly."

Velie said that while the IBEW workforce has grown by roughly 100 employees since 2006, the greater Hydro workforce has grown by about 1,000 positions in the same period. It's one of the reasons why he feels IBEW workers will remain immune to any forced layoffs.

"We've seen very minimal growth. Most of the growth at Manitoba Hydro in the last 10 years has been the middle- and upper-management, engineering because of megaprojects," he said. "That's where I think Manitoba Hydro has to cut the most positions."

About 300 IBEW members — or 10 per cent of the union's members working for Hydro — are eligible to retire right now. Assuming the deal to be revealed Monday is fair, Velie hopes those employees consider taking the pay-out.

"We'll be advising our members to ask questions, make sure that this is suitable for them," he said. "Each person's situation is going to be different. There's some people who are married and have a mortgage, some people that are single, some spouses have a pension as well, so everybody's situation is going to be different."​

Retire 'with dignity'

Owen said the Crown corporation will remain focused on delivering good customer service throughout the transition.

"The wish is is that people who are in a position to retire can with dignity, and those people who are interested in a career change or have opportunities elsewhere — going back to school, for instance — can do that, too, with dignity," Owen said.

But Mravinec said it's hard to imagine a scenario where losing 900 staff wouldn't hurt Manitoba Hydro.

"It's going to have an impact to Manitobans — a negative impact on services," Mravinec said.

It's difficult to predict at this point exactly what those negative impacts will be, he said.

"Manitobans deserve good access to Hydro services, not less, and these cuts will almost definitely mean they'll have less access to services."