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The union that represents staff at the Regional Municipality of Wood Buffalo (RMWB) is accusing the municipality of violating the Alberta Labour Code during bargaining talks.

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The accusation comes after the RMWB acknowledged in June that senior directors were given more than $1-million in “illegitimate” bonuses in 2021 and 2022. Leaders with the Canadian Union of Public Employees (CUPE) Local 1505 had heard rumours of these bonuses, but learned their extent when they were released by the RMWB in June. A list of the bonus recipients was later leaked to Fort McMurray Today.

Craig Milley, president of CUPE 1505, said the union was “were misled during collective bargaining at the financial status of the RMWB.”

“We enquired a number of times regarding bonuses being paid to exempt employees, which their bargaining committee denied,” said Milley. “The amount of money in excess of $1 million that was inappropriately paid to senior leadership would have impacted the Union’s decisions on monetary matters.”

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The union now also believes the RMWB’s lead negotiator during bargaining talks was likely the same lawyer who drafted the non-disclosure agreements that bonus recipients were required to sign.

Milley also says market-rate adjusted employees have only received a one per cent salary increase since 2017. Council was previously told all employees received a nine per cent increase over a three-year period, and anyone who did not would get a lump sum payment in lieu. Milley says the bonuses would have helped market-rate adjusted employees receive a similar raise.

In the meantime, Milley says union staff at the RMWB have been angry since the extent of the bonuses became public. Some non-union staff have also told CUPE leaders they were frustrated with how the RMWB has handled the situation.

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A statement from the RMWB said the municipality would not be commenting on the complaint as it is considered a legal matter.

“The municipality values our relationship with CUPE 1505 and is committed to working together to resolve this matter,” the statement said.

Lawsuit alleges former HR director ‘concealed’ bonuses

The RMWB alleges former human resources director Kari Donnelly “concealed, or caused to be concealed” bonuses worth more than $1 million, according to a lawsuit filed by the RMWB on June 7 in the Fort McMurray Court of King’s Bench.

Council was told the results of the investigation during a closed-door February meeting. The RMWB is not releasing the rest of the investigation, citing legal and privacy considerations.

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Donnelly is accused of approving the payments “with broad discretion” in 2021 and 2022. The accusations have not been proven in court.

A municipal spokesperson said a third-party investigation into the incident did not find any other current or former employees participated in the bonus approval process. The recipients have not been fired and will not be repaying the bonuses. There are no plans to fire any current staff over the handling of this matter.

“The bonuses were a surprise to these recipients and were represented as merit-based recognition for their efforts and to address a chronic leadership recruitment and retention issue,” reads a June 19 statement from the RMWB.

The RMWB is suing Donnelly for at least $201,958.30, which covers her severance and the bonus she allegedly gave herself, plus punitive damages and the RMWB’s legal costs.

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