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Arbitrator rules state must pay workers laid off after privatizing home for veterans

Jun 22, 2015

Credit michigan.gov

Michigan owes severance pay to eligible nursing aides who were laid off from a state-run home for veterans.

The Grand Rapids Home for Veterans is one of two state-run long-term care facilities for veterans in Michigan. More than 400 veterans are housed there.

Two year ago, more than 130 nursing aides were laid off to save the state a little more than $4 million a year. But that savings didn’t account for the severance packages employees should have gotten.

It’s not clear yet how many employees should have received severance pay, or how much they’ll get.

Gov. Rick Snyder approved the cost-saving move in 2011. But a legal case filed by a veteran put the layoffs on hold until early in 2013.

At least two workers filed for severance pay. But the state argued there was no money set aside in a special fund set up to cover severance pay, and the fund no longer existed, so the request was denied.

The union, Michigan Council 25, AFSCME, AFLCIO, argued that the state decided not to have a special fund dedicated to special severance pay during contract negotiations years ago. Instead, the state wished to pay severance on an as-needed basis out of the general fund.

“It is significant that the Employer does not deny that such an explanation was given in negotiations and the Employer’s negotiators offered no contrary explanation,” Arbitrator Ildiko Knott wrote in her June 17th opinion.

“The best thing you can hope for under these kinds of circumstances is for people to be made whole and to get the money that is due for them when they suffer from an unjust action,” union spokesman Greg Bowens said.

Bowens says the union is making similar arguments on behalf of food service workers who were laid off from the state prison system.

Marie Waalkes, who directs the Office of State Employer, declined to discuss the decision but issued this written statement:

Given this opinion has just been issued, we will be reviewing the arbitrator’s opinion in conjunction with the Attorney General and we will give careful consideration as to the next steps the state will take. Once our review is complete, we will have a clearer picture of what the next course of action will be and the potential costs associated with the severance pay.