The Nunavut Employees Union says the Government of Nunavut violated the Public Service Act by bargaining in bad faith during negotiations for a new collective agreement for its employees.

These allegations come in a statement of claim filed by the union at the Nunavut Court of Justice on Nov. 18. That's after government negotiators made mistakes when calculating how much money could be offered in salary increases, and more specifically, in increases for the Nunavut Northern Allowance benefit.

That's a benefit paid to help make up for high costs of living in the territory.

Now those negotiations are delayed and the union is calling for $50,000 in damages for the time lost. It said the government has a duty to reach a new agreement quickly.

The government of Nunavut denies allegations that it breached the Public Service Act. It said the union is not entitled to financial relief.

None of these allegations have been proven in court.

Union says northern allowance offer cut in half

The employees union and the territorial government had four sessions in 2019 to negotiate a collective agreement that will replace one that expired on Sept. 30, 2018.

In late October, both parties were set to enter mediation to finish the agreement. But before mediation started the finance department realized it didn't have the money it had promised.

According to the union, in June the government of Nunavut proposed a total bulk increase of $33,807,738 for its northern allowance payments to employees over the lifespan of the new collective agreement.

But in October, on day one of mediation, that offer dropped, by more than half, to $16,537,494. Proposed salary increases were also lower, the union said.

Gov't says pay and benefit increases calculated wrong

Negotiators had crafted an Excel workbook to help calculate proposals so that new offers wouldn't fall outside of salary allowances approved by the Financial Management Board. That workbook was used to calculate the northern benefits it proposed in June.

"The said June proposal was put forward on the understanding that it fell within the [government of Nunavut's] approved financial mandate," the government of Nunavut said in a statement of defence filed on Dec. 16.

But when finance and human resources officials met prior to the mediation meetings, they had concerns with the increases, and the deputy minister of Finance called for a review of the calculations used.

"It was discovered that the calculations used by the [government of Nunavut's] negotiation team during bargaining were incorrect," and the proposal was "well in excess" of what the government could offer, the statement of defence said.

The government said it alerted the union as soon as the error was realized.

The union said it was "shocked" by the news and told the government it would make a claim of bad faith if the proposal was rescinded during mediation.

It said it had been willing during bargaining to "make exchanges for further increases" to the northern allowance, and had waived asking for pay hikes to overtime, and holiday pay and for medical leave accommodations, because the benefit increase was generous.

The error caused "needless delays" in bargaining, the union said. "The defendant's course of action is inconsistent with the duty to make every reasonable effort to conclude a collective agreement."