WSIB President's salary under scrutiny by Conflict of Interest Commissioner

DOUBLE TROUBLE - There are fears a civil servant being paid by both the Ministry of Labour and the Workplace Safety Insurance Board could undermine Ontario's Sunshine Law

"It's a shell game the province's conflict of interest commissioner says is misleading and should be reviewed. The ministry of labour pretended to pay Workplace Safety Insurance Board president Jill Hutcheon for almost four years after she left her job as deputy minister. The ministry continued to list her six-figure salary as coming from government books despite her wages being reimbursed by the WSIB, an arm's-length Crown agency. . . The arrangement allowed the WSIB to skirt the provincial Sunshine List by disclosing Hutcheon's salary as being hundreds of thousands of dollars less than it actually was. The Sunshine List includes anyone who makes more than $100,0000 while working for the government, Crown agencies or public institutions. It's meant to give taxpayers information on where their money goes and to whom. For example, in 2005, the WSIB reported Hutcheon's salary on the Sunshine List as being $257,623.17. It was in fact much higher, as the labour ministry paid her $200,354.28 in that same year. In the four years between 2003 and 2007, Hutcheon was paid $844,000 by the WSIB. At the same time, the labour ministry paid her an additional $746,000, with both the board and the ministry issuing T4 tax receipts and listing her on the Sunshine List twice in years her two salaries both broke the $100,000 mark. She declined to be interviewed. "

TORONTO -- It's a shell game the province's conflict of interest commissioner says is misleading and should be reviewed.

The ministry of labour pretended to pay Workplace Safety Insurance Board president Jill Hutcheon for almost four years after she left her job as deputy minister.

The ministry continued to list her six-figure salary as coming from government books despite her wages being reimbursed by the WSIB, an arm's-length Crown agency.

The arrangement didn't break any rules but is open to misinterpretation and could lead to "adverse inferences," the province's COI commissioner, Sidney Linden, says.

"In my view, this method of payment and reporting could lead one to make adverse inferences regarding the salary to which an employee is entitled, although we see no basis for making any such inferences with regard to Ms. Hutcheon," Linden wrote in an e-mail to the Sun.

REVIEW POLICY

"However, as a result of the potential for drawing adverse conclusions, I intend to ask the ministry of finance to review their policy in order to avoid future misunderstandings."

The arrangement allowed the WSIB to skirt the provincial Sunshine List by disclosing Hutcheon's salary as being hundreds of thousands of dollars less than it actually was.

The Sunshine List includes anyone who makes more than $100,0000 while working for the government, Crown agencies or public institutions. It's meant to give taxpayers information on where their money goes and to whom.

For example, in 2005, the WSIB reported Hutcheon's salary on the Sunshine List as being $257,623.17. It was in fact much higher, as the labour ministry paid her $200,354.28 in that same year.

In the four years between 2003 and 2007, Hutcheon was paid $844,000 by the WSIB. At the same time, the labour ministry paid her an additional $746,000, with both the board and the ministry issuing T4 tax receipts and listing her on the Sunshine List twice in years her two salaries both broke the $100,000 mark.

She declined to be interviewed.

Linden said since the legislation creating his office only came into effect in 2007, he has no jurisdiction to look into anything that happened before that. But he still wants to look into how the government handles secondments in general.

"The broader 'potential for conflict' questions that secondments raise may warrant further consideration," Linden said. "Accordingly, I intend to review these broader questions with a view to possibly developing guidelines on a going forward basis."

The WSIB is a Crown agency that handles insurance claims for injured workers and is supposed to operate at arm's length from the ministry of labour. It pays its staff out of the premiums it collects from employers, unlike the ministry workers, who are paid by taxpayers.

"The WSIB paid Ms. Hutcheon's full salary," the board's acting director of external affairs, Brian Buchan, said.

"Ms. Hutcheon was on a secondment from the ministry of labour and therefore the WSIB reimbursed the ministry. The ministry of labour discloses the level of salary for the deputy minister and the WSIB discloses the difference." Buchan said because Hutcheon was on secondment from the labour ministry when she joined the WSIB in February 2003 as vice-president of policy and research, the ministry continued to pay her as a deputy minister until her retirement from the Ontario Public Service on Feb. 15, 2006.

Meanwhile, the WSIB also paid her and gave her hefty raises as she moved up from vice-president to chief of corporate services and ultimately, president and CEO.

Hutcheon, a veteran deputy minister with labour, began working for the WSIB on Feb. 3, 2003.

WASN'T MORE THAN $100G

In September 2003, she became chief of corporate services for the board. But because she was still on secondment from labour, Buchan said her entire salary and benefits of $214,000 was reported on the Sunshine List as being paid by the ministry. She in fact earned more money directly from the WSIB, but because it wasn't more than $100,000, it wasn't disclosed, Buchan said.

In 2004, when Hutcheon became interim president and CEO of WSIB, the board began reporting part of her salary while labour continued to list her as a deputy minister, even though she wasn't doing any work for them.

The secondment ended in 2006 with Hutcheon's retirement from the civil service. She continued to be double-listed that year though and it wasn't until 2007 that Hutcheon collected just one salary from WSIB -- worth $430,000 in total compensation.

That was actually about $60,000 less than she was paid the previous year, when the Sunshine List says WSIB paid her $364,000 salary and benefits, while labour kicked in an additional $125,500.

"It's ministry of finance rules," Buchan said of the arrangement. "We were following the guide."

But while the ministry of finance says seconded employees who are issued two T4s in a year should disclose both under the Sunshine List, it is not mandatory for seconded employees to have their salaries split.

"How the employee is disclosed can depend on the details of the secondment agreement," finance spokesman Scott Blodgett said.

"Some secondment agreements will have the employee remain on the former employer's payroll, which will be reimbursed by the new employer, yet the former employer will be the one to issue the T4. Other secondment agreements will include having the employee transferred to the new employer's payroll so that it is the one that issues the T4.

DISCLOSING EMPLOYER

"There is no requirement that the salaries of seconded employees be listed under both their current as well as their former workplaces, for the duration of their secondment. Whichever employer issues the T4 is generally the employer who discloses the employee."

Nor was there any mention of Hutcheon's secondment or continuing status with the ministry when it was announced she would be taking on the president's job in 2004.

"Prior to joining the WSIB a year ago, Hutcheon was deputy minister of labour for nearly four years," a ministry press release stated.

"I'm speculating but we might have said that for simplicity's sake," Buchan said.

"We wouldn't have discussed then where the paycheque was reported from." He said there's no rule against a labour ministry employee being seconded to the WSIB even though the board is supposed to remain at arm's length from the government.

"Its not unheard of," Buchan said. "I wouldn't say it was common but there are instances I'm aware of."

Hutcheon makes considerably less as president of the board than her immediate predecessor. David Williams pulled down more than $600,000 in 2002 when he held that job.