About 20,000 members of the largest public sector union in Newfoundland and Labrador have voted to accept a new collective agreement that promises no layoffs.

The Newfoundland and Labrador Association of Public and Private Employees said Wednesday the contract has been ratified by an 88 per cent vote.

"This has been a long and especially difficult round of bargaining, so we are happy to reach this stage and see this overall result," said NAPE president Jerry Earle in the release.

"We will now work on getting the agreements signed as quickly as possible."

Earle told CBC Television's Here & Now that the agreement gives younger workers "peace of mind. You're not going to be tossed to the curb in the next budget."

The controversial offer from government included a no-layoff clause for the duration of the agreement, no wage increases, and a severance buyout that will cost taxpayers about $250 million.

We have a fiscal situation that nothing else compares to other than the 1930s. - Tom Osborne

Finance Minister Tom Osborne defended the no-layoff clause, saying layoff targets are difficult to meet for several reasons, including union bumping, as well as lost productivity and morale problems.

"If this were 10 years ago … layoffs may have been the right way to go, but today, with approximately 5,000 people eligible to retire, we have a unique situation in this province," he said.

"We also have a unique situation because for the first time in literally decades we have a fiscal situation that nothing else compares to other than the 1930s."

Newfoundland and Labrador Finance Minister Tom Osborne says the $250-million severance buyout will help stimulate the economy, and says workers will feel safe in spending their paycheques if they know they won't be laid off. (Eddy Kennedy/CBC)

Removing the prospect of layoffs, said Osborne, also gives workers a sense of security.

"Our public servants can go to work knowing that they are able to spend their paycheques, and will open their wallets because they are no longer concerned that they are going to be turfed."

Osborne also said the quarter of a billion dollar severance buyout will help stimulate the provincial economy.

"So not only does that take a liability off of our books, which the bond rating agencies and our lenders wanted to see … but it also puts money into the local economy."

Earle said the public service didn't create the financial problems that now face the province. He doesn't buy criticism that there are too many people working for government, but said he is willing to talk about "efficiencies."

As for using attrition to eliminate jobs, he calls that the "lesser of two evils" and cautioned that it will still have an impact on services.

Retirement benefits changed

Other details of the agreement for 15 NAPE bargaining units were outlined in a government news release Wednesday. They include changes to group insurance for new employees.

Current employees qualify for group health and life insurance into retirement, if they have 10 years of service, but new hires will need 15 years.

Premiums at retirement will now be calculated on a sliding scale based on years of service instead of the current 50-50 cost-shared formula.

Business groups such as the St. John's Board of Trade and the Employers' Council criticized government for going too far at a time when the province's finances are dire.

NAPE fought back with a campaign that strongly encouraged local businesses to display stickers supporting union members, or be at risk of losing customers.

Portobellos co-owner Barry Bennett displays a NAPE sticker in window of his St. John's restaurant, after union members cancelled a big reservation at his restaurant. (Eddy Kennedy/CBC)

The NAPE contract applies to 15 bargaining units, including health-care professionals, clerical and office staff, highway and ferry workers and liquor store employees.

The strongest endorsement — 96 per cent — came from student assistants. However, maintenance and operational services and faculty at the College of the North Atlantic gave the deal a less enthusiastic 74 per cent thumbs up.