Cancelling bonuses carries a heavy cost for eHealth Ontario, which has settled with 738 workers.
It’s a lesson in media and employee relations that HR pros would do well to take note of. eHealth Ontario will pay $7.16 million to 738 employees who had their raises and bonuses withdrawn in 2011.
The staff were originally promised 1.9% merit raises and average bonuses of 7.8%, despit a government wage-freeze in place at the time. Employees were given letters with details of their merit increase and bonuses as part of a morale-boosting ceremony in May 2011. However, the electronic health records agency reneged on the offer after media criticism.
The eHealth Ontario employees began the class-action lawsuit against the provincial organization last year, and have now settled the claim for about two-thirds of their original claim of $11 million.
According to a report in The Star, for 2011-12, the workers will get half of their performance incentive award, but no merit raises and eHealth will pay $115,000 in legal costs, though law firms in such class action suits can be eligible for up to 30 per cent of the settlement.
Health Minister Deb Matthews said it was smart to avert costly litigation.
“Based on legal advice, eHealth has made the responsible decision to reach a negotiated settlement that looks out for taxpayers by avoiding lengthy and costly litigation, which could have cost millions more,” Matthews told The Star.
