MINUTES OF THE UNION MANAGEMENT CONSULTATION COMMITTEE (UMCC) MEETING
HELD IN THE FOUNTAIN ROOM, NATIONAL ARTS CENTRE
AT 0900 HRS, DECEMBER 8, 1997

Members:
VAdm G. Garnett, Vice Chief of the Defence Staff
VAdm G.R. Maddison, Chief of Maritime Staff
LGen W. Leach, Chief of Land Staff
LGen A. Dequetteville, Chief of the Air Staff
RAdm J.A. King, representing Assistant Deputy Minister (Policy)
LGen R. Crabbe, Deputy Chief of the Defence Staff
LGen D.N. Kinsman, Assistant Deputy Minister (Personnel)
Mr. P. Lagueux, Assistant Deputy Minister (Materiel)
Mr. R.M. Emond, Assistant Deputy Minister (Finance and Corporate Services)
Mr. J.L. Adams, Assistant Deputy Minister (Infrastructure and Environment)
Mr. L. Gordon, Chief Public Affairs
MGen K.G. Penney, Chief Review Services
BGen P. Boutet, Judge Advocate General
Mrs. M. Boudrias, Associate Assistant Deputy Minister (Personnel)
Mr. P. Millette, National President, Union of National Defence Employees
Mr. S. Hindle, President, Professional Institute of the Public Service of Canada
Mr. A. Holman, President, Federal Government Dockyard Trades and Labour Council (East)
Mr. D. Quigley, President, Federal Government Dockyard Trades and Labour Council (West)
Mr. D. Roode, President, Federal Government Dockyard Chargehands Association
Mr. P. Morse, Business Agent, International Brotherhood of Electrical Workers, Local 2228
Capt. M. Sjoquist, President, Canadian Merchant Service Guild
Mr. M. Hosking, President, Association of Public Service Financial Administrators
Dr. J. Treddenick, President, Canadian Military College Faculty Association

Attending:
MGen L.C. Campbell, Director General Strategic Planning
BGen W. Richard, representing DND Chief Information Officer
BGen P. Gartenburg, Director General Management Renewal Services
Mr. R. Sullivan, Director General Employee Relations
Ms C. Bragg, Director General Regional Civilian Personnel Services
Ms T. Lucier, Acting Director General Civilian Human Resources Strategy and Development
Ms K. Howard, Manager, Alternate Service Delivery Program
Mr. R. Hanson, Director Civilian Employment Policies
Ms S. Harrison, Acting Director Employee Relations Operations
Col. W. Brewer, Special Assistant, Vice Chief of the Defence Staff
Ms T. Namiesniowski, Executive Assistant, Deputy Minister
Ms S. Bennett, Employment Adjustment Officer
Mr. J. MacLennan, Executive Vice President, Union of National Defence Employees
Mr. N. Kemp, Vice President, Federal Government Dockyard Trades and LabourCouncil (East)
Mr. R. Taylor, Vice President, International Brotherhood of Electrical Workers, Local 2228
Mr. W. Courtney, Federal Government Dockyard Chargehands Association
Mr. W. Miller, Professional Institute of the Public Service of Canada
Mr. D. Cardinal, Professional Institute of the Public Service of Canada

INTRODUCTORY REMARKS

1. The Deputy Minister (DM) opened the meeting and welcomed all present. In her opening remarks, the Chairperson talked about the need to communicate with unions, employees and managers throughout the Department. She also discussed the necessity of a more formal consultative labour/management structure and suggested that a new consultation framework be developed with the unions representing its employees. This meeting was intended to deal with the way ahead for the Department, especially from the Alternate Service Delivery perspective. DISCUSSION

FINANCIAL REVIEW

2. DGSP delivered a financial overview of the Department including the reduction strategies to date, the current financial situation, other pressures on spending and the way ahead. MGen Campbell included a strategic capital review, a description of additional ASD options and a fundamental capability and readiness review. The DM emphasized that the defence budget is eroding, it is unlikely that it will be increased and capital and operational needs of the Canadian Forces were not diminishing.

3. Issues raised by Mr. Quigley focused the ensuing discussions on the source of funding for large domestic or international military operations and the possibility of Treasury Board (TB) compensation for salary increases as a result of collective bargaining negotiations. Essentially, while the salary increases for civilian employees are the subject of discussion with TB, funding for military pay increases and taskings must be found within the Department of National Defence (DND) budget.

ECS & ADM ROUND TABLE

4. CMS led the round robin by acknowledging the renewal of the fleet and naval infrastructure in the past ten years, outlining the renewal yet to be accomplished and giving examples where savings have been accomplished. He acknowledged and thanked the unions for their role in MARCOM's ability to reach its goals. VAdm Maddison restated the navy's commitment to communication about reductions and renewal activities and his commitment to working with the unions.

5. Mr. Quigley responded by reminding everyone that union members have worked together with management to obtain many of the savings achieved within MARCOM. He described how union members had willingly changed their way of doing business in order to reach a Most Efficient Organization (MEO) only to lose work to the private sector without the benefit of a business case analysis. He asked that management establish a proper baseline and complete a business case analysis between the FMFs on each coast and the private sector. Unions also wanted reassurances that management had considered the possible results of contracting out ship repair in war situations.

6. Management responded that work must still be done to determine the most cost effective options and the balance between in-house and private sector services. Reassurance was given that all strategic aspects are considered before a contract is tendered to the private sector.

7. CLS outlined the need for the Army to find funds for capital acquisition and operations. LGen Leach described the funding levels for the Army over the past ten years and presented information on the amount devoted to personnel and infrastructure support. The challenge ahead for the Army is a balance between operations, capital acquisitions and support requirements.

8. CAS presented an overview of the efforts made by the Air Force to streamline its business processes and work methods. He also talked about the reductions achieved to date.

9. ADM(Per) gave a summary of the results of the reduction programs. He further described the significant reduction initiatives within ADM(Per), specifically in CFRETS, the Personnel Support Program and Chaplaincy services.

10. ADM(Mat) discussed the need for DND and the Canadian Forces to maintain combat and combat support capabilities. He recognized that ADM(Mat) is not considered to be either combat or combat support. He advised that ADM(Mat) was refocussing on assured support. He went on to advise it was ADM(Mat)'s plan to develop a multi-year plan to examine all activities within the Group.

ASD REVIEW

11. Ms. Howard reviewed the ASD program to date outlining the background to the program. She advised that, of the 16 projects on Plan 97, 4 had been completed and 12 were still underway. Two of the completed four had been retained in-house, one activity was transferred to another government department and one was transferred to industry. The 14 projects on Plan 98 were also underway. An update on employee takeovers and in-house bids was also given.

12. Ms. Howard advised that DND had received 52 Employee Takeover statements of interest. Five had been authorized to proceed to further development. Ms. Howard further advised that two in-house bids, excluding those associated with the Canadian Forces Housing Agency, had been successful. Both realized approximately 30% savings from a previously re-engineered baseline.

13. Mr. Sjoquist posed a question on the status of the West Coast Auxiliary Fleet initiative. CMS indicated that he is hoping to receive the proposal by the end of 1997 and a way ahead decision will follow.

MOS REVIEW

14. Col Brewer, SA/VCDS briefed the members of the committee on the MOS Review which was designed to provide a baseline for the future structure, including numbers, of military occupations. He outlined the aim, policy baseline (1994 White Paper) behind the review, additional taskings considered during the review. The review demonstrated that approximately 63,600 personnel are required in uniform, of which approximately 3,800 were identified as military non-essential. A further review is now underway to study these positions to determine the potential for doing business differently. Col Brewer ended with the strategic uses of the MOS review findings.

15. The following discussion focussed on the various outcomes which could result from the further study of the 3800 military non-essential positions, including the possibility of military non-essential positions being civilianized.

FUTURE PERSPECTIVE

16. ADM(IE) presented the future perspective of DND as a result of the fiscal reality facing the department. Following a DM/ADM retreat in May 1997, it was determined that DND needed to undertake a radical review of its systems. A disproportionate share of DND's resources were being spent in support and savings had to be identified that could be spent on recapitalization. ADM(IE) was then asked to chair meetings with representatives from industry, other government departments and foreign defence departments to examine what alternative models existed that DND could adopt. Conclusions from these meetings were then presented. It was concluded that although DND had made significant savings, these savings were not sufficient and only allowed the department to exist within the present budget reductions. However, more savings would have to be found. To do this, a new top-down approach to ASD would be necessary as would a radical review of end-to-end systems. Further conclusions were to conduct selected systems reviews as pilot projects (e.g. supply and distribution, base support), to develop a reinvestment strategy, to adopt life cycle contracting and to pursue assured support versus ownership.

SUPPLY AND DISTRIBUTION SYSTEM

17. DGMRS provided an overview of the Supply and Distribution System initiative including the components of the system, method of distribution, functions included and preliminary schedule of activities. As this review was in the very early stages, it was too soon to make a decision on IHBs.

18. Mr. Millette started the discussion by providing his views on the role for the unions in this and other initiatives. The DM took the opportunity to advise that it was DND's intention to invite the unions significantly affected to sit on the steering committee for this and the other major initiative (Site Support Services) once it was established.

19. Mr. Morse questioned the Department's development of performance specifications and costing and measurement tools for the Supply and Distribution project. BGen Gartenburg responded by assuring all present that DND would not jeopardize operational performance and that the development of a costing methodology, key to the decision making process. Contracting out would be a viable option if it would be more effective. Additionally off-ramps were built into the process where security and other issues could be addressed and actions taken where appropriate.

20. Mr. Quigley asked about the ASD review that was being conducted on the ammunition depots. He was advised that all activities and functions within the supply chain will be included in the scoping exercise of the Supply and Distribution project, off-ramps exist where various factors could lead to any activity being removed from the project. It may be assumed that the ammunition depots will not likely remain part of the Supply and Distribution project.

21. Secretarial note: To clarify the issue of an ASD review on the ammunition depots, management's opinion is that off ramps will be introduced in the review of the supply and distribution system. If it is not feasible to include the ammunition depots in this study, they may be removed but will be subject to a separate ASD review led by ADM(Mat).

BASE SUPPORT SERVICES

22. DGMRS provided an overview of the base support services initiative of the seven identified bases (Borden, Gagetown, Gander, Montreal, Shilo, Suffield, Wainwright) including the services affected, the initial scope of the initiative, the defining principles, the preliminary approach and a possible timeline. Management confirmed that the competition for base support services, if chosen as the way ahead, would be structured in a way to include IHBs. Once again, unions were invited to sit on the steering committee once it is established.

CIVILIAN HUMAN RESOURCES STRATEGY

23. Mr. Hanson outlined DND's current civilian HR strategy with respect to ASD, gave examples of current approaches to employment continuity, highlighted issues that would influence a future HR strategy and proposed several elements for that strategy.

24. Ensuing questions sought to clarify issues regarding Type 2 job offers, length of job guarantees, unions' role in meeting with new service providers and whether there would be a military HR strategy. Management reiterated that the department is looking to the union for their involvement in the development of a new HR strategy which will determine approaches to employment continuity and establish a framework for union participation in ASD initiatives. Clarification on the status of Work Force Adjustment Directive negotiations was also provided.

CIVILIAN EMPLOYABILITY STRATEGY

25. Ms Lucier introduced the concept of employability, the current training situation within the department and the future activities necessary in this area. Unions were invited to participate in the development of a strategy to facilitate employability of DND employees. 26. Questions arose on the history of competencies and how they are being developed across the Public Service. The model from DND is being used as a benchmark but work has yet to be done to create a common framework. Mr. Quigley acknowledged the willingness and leadership of DND to take on this project which is the only one to address the needs of employees in the Operational Category.

NATIONAL UNION MANAGEMENT CONSULTATION

27. Assoc ADM(Per) tabled a framework and DGER addressed the proposals for a national union management consultation committee. Union response was positive and they asked that the framework be finalized quickly. DGER will act as Office of Primary Interest (OPI.)

CLOSING

28. A number of issues were raised in a final round table. These included: the allocation of Treasury Board funds that may be given in compensation for collectively bargained pay raises; the possibility of a second wave in the base support services review; distribution of savings through shared services between departments; the definition of a most efficient option; methods of demonstrating reduced productivity from non-task related departmental initiatives in MEO evaluations; and the impact of departmental systems failures (PeopleSoft, etc) on IHBs and MEOs.

29. Before concluding the meeting, the DM reviewed the decisions taken and action items resulting from the meeting:
a. a formal labour/management consultative framework will be put in place, a sub-committee on ASD will form part of the framework;
b. the current HR strategy for civilian employees affected by ASD will be reviewed. The unions are invited to contribute to the development of strategies concerning employment continuity and employability;
c. there will be union participation on the steering committees for the supply and distribution and base support services ASD reviews. These committees will be formed in the near future;
d. if base support services are competed, IHBs will be included. It is too soon to determine whether IHBs will be included in the supply and distribution review;
e. Unions were issued a standing invitation to view tender evaluations in ASD competitions.

30. Mme Fréchette closed the meeting by thanking all the participants and stated that she hoped this meeting would be the first of a new productive labour-management relationship. The meeting was adjourned at 14:50 hrs.

Louise Fréchette
Chairperson