Salary negotiations are now concluded, with the settlement outlined below. We will be hosting a Town Hall in May to discuss further details and next steps. The purpose of this communication is to give a quick overview of the settlement, some context of how it was reached, and important considerations for determining next steps for FAUW in the wake of this round of negotiations.
As you may recall, FAUW and the Administration entered Arbitration in March. The Arbitration hearing was on March 25, and Arbitrator Kevin Burkett asked for final submissions on April 9. Arbitrator Burkett indicated that he would choose the offer closest to what he recommended at the hearing, and FAUW concluded that the optimal strategic decision was to make an offer we believed would best meet these recommendations. The Final Offers from both FAUW and the Administration were submitted on April 8, and Arbitrator Burkett chose FAUW's offer.
Salary Settlement Arbitration Award, 2024-2027 (PDF)
In brief, the settlement consists of salary scale increases for the three years beginning May 1, 2024, 2025, and 2026 (with a reopener for 2026); a 3% additional adjustment to our salary structure; and the recommendation of a health care spending account (HCSA). We provide some important details and context to each of these in the following.
Scale increases
2024: 4.7% (comprising 3.9% + 0.8% catch-up)
2025: 3.6% (comprising 2.8% + 0.8% catch-up)
2026: 2.2% (subject to a reopener)
The scale increase for 2026 will be subject to a reopener, meaning that this issue (and this issue alone) will be subject to a further round of negotiations beginning in late 2025.
An important principle of FAUW's negotiation was addressing wage erosion resulting from unprecedented inflationary pressures experienced since the 2021 salary settlement. The Administration rejected the principle of wage erosion throughout the negotiation process. At no time (prior to the Arbitration hearing) did the Administration’s negotiating team offer any form of inflationary 'catch up' to address this critical issue. As stated in Arbitrator Burkett's decision, "The University disputes that any catch-up is warranted."
The scale increases for 2024 and 2025 are a combined 1.6% above projected inflation. This therefore represents an initial step towards addressing that wage erosion.
The scale increase for 2026, being subject to a reopener, will offer an opportunity for further catchup on wage erosion. This will allow time for more information to become available, including inflationary changes and settlements reached at other universities. The reopener is automatic, requiring no trigger. This is in contrast the Administration's offer, where they attempted to require the reopener be triggered only if actual inflation was over 3.2%. As Arbitrator Burkett notes, the inclusion of this trigger is "especially problematic."
3% additional increase to all salary structure components
This adjustment to salary structure addresses an oversight in 2023, when the reopener scale adjustments should have been thus applied per Article 13.2.2 of our MoA. The increase applies to all Floors, Thresholds and Selective Increase Units (SIUs). This was the one item where FAUW and the Administration reached a quick agreement.
For details about how scale and salary structure increases affect our salaries, please see FAUW's Faculty Salaries at Waterloo, which includes numerical examples, and links to a technical appendix for those who like a formulaic breakdown.
Health care spending account (HCSA)
The settlement includes a recommendation to the Pension and Benefits Committee to introduce a $300/year health care spending account (HCSA) per active faculty member. This amount may be rolled over up to a maximum of $600 every two years. The HCSA may be used on medical expenses not covered by the existing health benefits plan. We highlight that, since it is per active faculty member only, the HCSA is *not* available to retirees, *nor* does it scale with family size because it is per employee, not per participant. This is in contrast to the vision care increases FAUW advocated for, which would have provided coverage for glasses, contact lenses, and other services for retirees and dependents.
The Administration proposed an HCSA as a less costly alternative for UW, further noting that the $300 could be used for vision care, mental health care, and any other miscellaneous health care items not otherwise covered. FAUW contends that an HCSA should be a complement to a comprehensive benefits program, and that without additional vision care, our benefits program cannot be considered comprehensive. However, based on Arbitrator Burkett favouring the HCSA during Arbitration, we felt it necessary to include an HCSA in our final offer in order to ensure the best overall settlement for our members. FAUW emphasizes that the inclusion of an HCSA in our proposal did not reflect a belief that it is preferable to extending our vision care (or any other) benefit.
Reflecting feedback received from members, FAUW's negotiation position included a commitment to the principle of a comprehensive healthcare plan. Our initial proposals included the introduction of vision care benefits beyond the $85 we receive every two years for eye exams. We also repeatedly made a case for increases to our mental health benefit maxima. We are the only one among our comparators without vision care beyond eye exams and have the lowest provision of mental health care coverage other than Queen's.
Arbitrator Burkett noted that "The University's proposal was and continues to be conditioned upon a recommendation for acceptance to the Pension and Benefits Committee." As established in Article 10.2 of our Memorandum of Agreement, "The Memorandum of Settlement may also include an amount for proposed changes in benefits defined in University Policies and/or administered by the Pension and Benefits Committee. If the proposed benefit changes are not approved, the negotiated amount shall be awarded as a scale change.”
What's Next? We need your feedback!
FAUW will conduct a Town Hall in May to discuss the settlement and address comments, questions, and concerns from our members. We will also be providing further details on this round of negotiations, and some of the considerations and concerns that arose during the negotiation process.
Visit FAUW salary settlements for more information, previous salary settlements and a joint statement from the Office of the Vice-President, Academic and Provost.