Voluntary Severance Packages FAQ

Hello members,
Over 4000 members of USW Local 1944 have been offered Voluntary Severance Packages, and as a result, the local has received many questions from our members. The purpose of this communication is to answer some of the most Frequently Asked Questions. It is important that our members understand that the Company controls the VSPs, and it is the Union’s goal to protect and maintain the employment of its members, therefore USW Local 1944 advises our members to direct their questions regarding the VSP to their manager.

Should you take the VSP?
The Union does not want to lose its membership to VSPs. However, we also understand that some of our members may be considering Telus' offer. We made this chart to help members decide if they should take the package or not, as there are many things to think about.
Short Term – Will you be able to support yourself on the VSP if you cannot find another job right away? You may be getting a lot of money, but you have to consider how much will be taxed. If you invest part of the money in an RRSP to reduce the taxes you would have to pay, that money is no longer easily accessible. You have to decide how much to keep and how much to invest. You should contact your financial institution for advice on investment plans and make an informed decision for your short-term needs.
Medium Term – Will you be able to find a job that has equal pay, benefits, and the protection of a Union? While there are many jobs that offer a competitive salary, wages alone are not the only thing you should look at. In 2022, 29% of Canadian Workers were part of a Union[1]. Unions bring job protection, higher wages, and benefits[2]. Will your next job have a benefits plan? Will you or your dependents need to see a dentist? Will you even have a job? Economists are forecasting a recession in 2024. Before deciding to take the package, consider if this is the right thing for your family’s well-being.
Long Term – Will your next employer have a pension plan? As of January 1, 2021, just under 40% of Canadian Workers had a company pension plan[3]. Moreover, regardless of whether it is a Defined Benefit or Defined Contribution Pension Plan, one thing is clear: having a plan is better than not having a plan. Will your next job allow you to retire with dignity?
How much tax will be deducted from my VSP? Should I put the money into an RRSP, TFSA, etc.?
Your VSP payout could be reduced by a minimum of 30% in tax, but that percentage will vary from province to province. You should contact a financial expert for questions like these, as it is unlikely that your manager or your Local Union Representative, Shop Stewards, etc. are positioned to give you the best possible advice. The Union highly recommends you to contact your financial institution for advice on investment plans.
Is the amount of money different for Part-Time and Full-Time members?
Yes. The calculation of the current VSP offering is based on monthly earnings; therefore, since Part Time members would normally work fewer hours, they would receive a lower offering. For further details, contact your manager.
I took the $10,000 Lump Sum in two $5000 payments. If I take the VSP, will I receive the second $5000 payout?
Yes. The second part of your Lump Sum will be paid out this year instead of being deferred to 2024.
Why are members on leave (STD/LTD/Maternity/Parental/Compassionate Care) not offered a VSP?
The Company typically offers VSPs to active employees only. While this may, in the above cases, seem exclusionary the Company has the right to choose which departments to offer the VSP to, and there is case law to support the Company’s ability to exclude members on various leaves. For more details on who is being offered a VSP and why, contact your manager.
I am not on any leave, why was I not offered a VSP?
The Company has the right to determine the scope of the VSP offering. The VSP is offered based on criteria the Company has determined. For more details on who was offered a VSP and why, contact your manager.
I was not offered a VSP, is there a way I can get one?
Local 1944 advises members to ask their manager. The Union has no way of compelling the Company to offer a VSP. This is something that is entirely under the Company’s control. It is the Union’s goal to protect and maintain the employment of its members.
Will I pay Union Dues on the package?
VSPs are paid out as severance, and as opposed to wages, they are not subject to Union dues.
If I say yes to a package, am I guaranteed to get one?
No. Ultimately, the Company can decide who they give a VSP to, based on many reasons, including how many have accepted the offer in a specific area/department.
In Solidarity,
USW Local 1944