A decision by the Calgary Parking Authority to scrap the retirement allowance for its long-time employees has surprised the union representing its workers.

CBC News revealed Monday that as of Aug. 1, 2020, the parking authority will stop giving qualified employees a payment equivalent to their annual vacation entitlement when they retire.

To be eligible for the allowance, a departing employee must be no younger than 55-years-old, have worked at least 25 years for the organization and meet all eligibility requirements to retire.

The CPA's decision echoes a similar one made by city council in December 2019 to give notice that it will end the payments on Dec. 31, 2021.

The head of Canadian Union of Public Employees (CUPE) Local 38, D'Arcy Lanovaz, was caught off guard by the decision as it did not come through a contract negotiation.

He was also unhappy about the six month timeframe for scrapping the payments, which are considered part of the total compensation package for employees.

"If their intent is to follow through and end that practice, we will consult with legal counsel and we'll take steps through the arbitration court system to ensure that we're going to protect the rights of our members," said Lanovaz.

Disrespectful to union

He also isn't happy with the lack of communication from the CPA about its choice to follow city council's lead.

"Frankly it's disrespectful but we still believe it doesn't make any difference to the legal challenge and we'll be pursuing that."

Ending such payments quickly is thought to be a tricky matter for the City of Calgary and its subsidiaries.

Council was warned in December that it had to give 24 months notice to end the payments or it would likely face legal action.

Several members of council wanted to end the payments sooner.

However, a city lawyer told council the law department obtained an outside legal opinion on the matter.

'High risk'

That review concluded there were significant risks if city council didn't give a full 24 months notice that the payments were being cancelled.

"It is extremely high risk that the action that the city is taking could be successfully challenged," said Jill Floen.

She went on to warn council of the need for the city to exercise extra caution in its dealings with unionized staff.

"We must incorporate this change into the collective bargaining process and if we do not, we could be subject to unfair labour practice allegations as well as the possibility of successful grievances and court applications."

Another wholly-owned subsidiary of the city, Enmax, has decided to maintain the payments.

It said the payments cannot be dropped as they're currently included in its union contracts. An official also said the payments help Enmax stay competitive with the compensation offered by private companies in the electricity industry.

Other city owned organizations such as the Calgary Zoo, Calgary Economic Development and the Calgary Municipal Land Corporation do not offer the retirement payments to long serving members of their staff.