1 annotated employment contract for school superintendents and second level leaders jim davies...

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ANNOTATED

EMPLOYMENT CONTRACT

FOR

SCHOOL SUPERINTENDENTS

AND

SECOND LEVEL LEADERS

JIM [email protected]

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WHAT BOARDS AND SUPERINTENDENTS SHOULD KNOW ABOUT EMPLOYMENT CONTRACTS

Basic Legal Concepts Relating to Employment Employment Law

Employment Standards CodeCommon LawRelated statutes

Labour Law

Employment Standards CodeLabour Relations CodeArbitration Decisions

The Distinction Between Employment and Labour Law

Employment: ContractLabour: Collective AgreementReinstatement: only applies to labour law

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Unwritten Employment ContractsConstituents:

•oral and written (entire agreement clause)

•employer policies and rules

•common-law implied clauses

•statute (Employment Standards Code)

•management’s rights

Outcome: Uncertainty


Written Employment Contracts

Deal with all of the above

Outcome: Certainty

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Termination SCC: Duty of fairness when school boards in terminate senior staff

Elements of fairness:• Notice of concerns• Opportunity to respond (hearing)• Unbiased panel• Representation by counsel• Reasons for decision

ELIMINATED IN MANY EMPLOYMENT CONTRACTS

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Second Level Leaders’ Contracts Consider your status:

School Act: Sections 96, 106- 108, 110, 132

Administrative, supervisory and consultative positions

96(1) Subject to section 93, a board may appoint any person or designate a teacher to an administrative, supervisory or consultative position.

(2) When an organization representing teachers carries on collective bargaining on behalf of the teachers, a board and the organization,

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Second Level Leaders’ Contracts

(a) in the case of any teacher who has been designated by the board to an administrative, supervisory or consultative position, may, through negotiation, include or exclude that teacher from the teachers on whose behalf the organization is bargaining, and

(b) in the case of any teacher who as a result of making an election under section 5.1 of the Teaching Profession Act is not an active member of The Alberta Teachers’ Association, must exclude that teacher from the teachers on whose behalf the organization is bargaining.

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Termination of contract

106(1) A contract of employment between a board and a teacher automatically terminates at the time that

(a) the certificate of qualification of the teacher is suspended or cancelled by the Minister, or

(b) the certificate of qualification of the teacher expires.

(2) A contract of employment between a board and a teacher or a designation of a teacher made pursuant to section 19, 95 or 96 may be terminated by mutual consent.

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Second Level Leaders’ ContractsTermination by board

107(1) Whether or not the board has suspended a teacher under section 105 and whether or not the suspension, if any, has been appealed to the Board of Reference, a board may terminate

(a) a contract of employment with a teacher, or

(b) a designation of a teacher made pursuant to section 19, 95 or 96, after giving the teacher written notice of termination not less than 30 days prior to the effective date of termination.

(2) In terminating a contract of employment or a designation, the board shall act reasonably.

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Second Level Leaders’ Contracts(3) A notice of termination of a contract of employment or a designation shall specify the reasons for the termination.

(4) Where a teacher has been served with a notice of termination of a contract of employment or a designation, the board may suspend the teacher from the performance of the teacher’s duties in accordance with the notice.

(5) A notice of termination of or the termination of a designation does not terminate a contract of employment.

(6) A teacher who has been suspended under this section must be paid the teacher’s salary until the effective date of the termination of the teacher’s contract of employment or the designation.

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(7) If a teacher is served with notice of termination under subsection (1) and the teacher has been suspended under section 105 before the notice is served, an appeal, if any, to the Board of Reference in respect of the suspension shall not be proceeded with but is merged with the appeal, if any, to the Board of Reference in respect of the termination under this section.

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Second Level Leaders’ ContractsTermination by teacher

108(1) A teacher may terminate

(a) a contract of employment with a board, or

(b) a designation of the teacher made pursuant to section 19, 95 or 96,

by giving the board 30 days’ written notice of the teacher’s intention to terminate that contract or designation.

(2) If a teacher has terminated the teacher’s contract of employment with a board before rendering any service under the contract, the teacher shall not be employed by another board unless the board with which the teacher’s contract was terminated gives its prior approval to the teacher’s employment with the other board.

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Second Level Leaders’ ContractsTermination by teacher

108(1) A teacher may terminate

(a) a contract of employment with a board, or

(b) a designation of the teacher made pursuant to section 19, 95 or 96,

by giving the board 30 days’ written notice of the teacher’s intention to terminate that contract or designation.

(2) If a teacher has terminated the teacher’s contract of employment with a board before rendering any service under the contract, the teacher shall not be employed by another board unless the board with which the teacher’s contract was terminated gives its prior approval to the teacher’s employment with the other board.


After Termination of Designation

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110(1) Notwithstanding section 106(2), a teacher, on receipt of a notice of termination of a designation made pursuant to section 19, 95 or 96, may terminate the teacher’s contract of employment by giving 30 days’ written notice to the board of the teacher’s intention to terminate that contract.

(2) No appeal may be made from a termination of a contract to the Board of Reference if the contract of employment is terminated pursuant to subsection (1).

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BOARD OF REFERENCE

Appeal

132(1) This section does not apply to

(a) a superintendent, chief deputy superintendent, deputy superintendent, associate superintendent or assistant superintendent of a board, or

(b) a teacher who, under section 96(2), is excluded from the teachers on whose behalf an organization is bargaining.

Note: you can be excluded under 96(2) by being bargained out of the collective agreement, or by electing to cease being an active member of the ATA.


CONSEQUENCES OF TERMINATION OF DESIGNATION

No appeal to Board of Reference

No possibility of reinstatement

If you don’t have an underlying principalship or teacher position, you are done

A major consideration if you are moving districts

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CONSEQUENCES OF TERMINATION OF DESIGNATION

Things to consider in contract:PrincipalshipContinuing teacher contractSignificant payoutReferenceMoving expensesJob search assistanceConfidentiality

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Superintendents’ Contracts Impact of :

School Act: Sections 113 & 114

Superintendents of Schools Regulation

Contract

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School Act

Superintendent of Schools113 (1) Subject to the regulations, a board shall

appoint an individual superintendent of schools for a period of not more than 5 years with the prior approval in writing of the Minister.

(2) Where a board applies for the Minister’s approval under subsection (1), it shall give to the Minister, in the form and containing the information required by the Minister, notice of its intention to appoint the superintendent.

(3) The superintendent is the chief executive officer of the board and the chief education officer of the district or division.

(4) The superintendent shall carry out the duties assigned to the superintendent by the board.

(5) The superintendent shall supervise the operation of schools and the provision of education programs in the district or division, including, but not limited to, the following:

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(a) implementing education policies established by the Minister;

(b) ensuring that students have the opportunity in the district or division to meet the standards of education set by the Minister;

(c) ensuring that the fiscal management of the district or division by the treasurer or secretary-treasurer is in accordance with the terms or conditions of any grants received by the board under this Act or any other Act;

(d) providing leadership in all matters relating to education in the district or division.

(6) The superintendent shall report to the Minister with respect to the matters referred to in subsection (5) (a) to (d) at least once a year.

(7) A report required under subsection (6) must be in the form and contain the information required by the Minister.

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School Act

Term of appointment114(1) A board shall not enter into a contract of

employment or a contract renewing a contract of employment with an individual who is appointed as a superintendent under this section unless the contract includes a maximum term of not more than 5 years with no option to renew or extend the contract at the end of the term if the individual is not reappointed under this section.

(2) If a board intends to reappoint a superintendent named in a contract referred to in subsection (1), the board shall, not less than 6 months before the contract ends, give to the Minister, in the form and containing the information required by the Minister, notice of its intention to reappoint the superintendent.

(3) A reappointment of a superintendent must be for a period of not more than 5 years.

(4) The Minister may approve or refuse to approve a reappointment under subsection (2), in any form the Minister considers appropriate, not more than one month after the Minister is notified under subsection (2).

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(5) If the Minister refuses to approve a

reappointment under subsection (2), the Minister shall give the board reasons in writing for the refusal.

(6) If the Minister refuses to approve a reappointment under subsection (2), the board shall appoint another individual as superintendent of schools in accordance with section 113.

(7) This section applies to a contract renewing a contract of employment whether or not the original contract was entered into before this section comes into force.

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ALBERTA REGULATION 178/2003

School Act

SUPERINTENDENT OF SCHOOLS REGULATION

Table of Contents

Definitions 1Qualifications 2Minister’s approval 3Severance allowance 4Expiry 5

Definitions1 In this Regulation,

(a) “Act” means the School Act;

(b) “equivalent standard” means an equivalent standard of education or experience as determined by the Minister;

(c) “superintendent” means a superintendent of schools appointed in accordance with the Act and includes an individual appointed to act in the office of superintendent..

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Qualifications2 (1) No individual may be appointed as a

superintendent unless the individual has

(a) a Bachelor of Education degree or equivalent from a university in Alberta or from a university of equivalent standard,

(b) a Master’s degree from a university in Alberta or from a university of equivalent standard,

(c) a certificate of qualification as a teacher issued under the Act or an equivalent certificate issued by another province or a territory, and

(d) 3 years’ experience in a school system in Alberta or in a school system of equivalent standard which is acceptable to the board that appoints the superintendent.

(2) Notwithstanding subsection (1), a person who is a secretary, a treasurer, or a secretary-treasurer appointed under section 116 of the Act may not hold the position of superintendent.

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(3) The term for which an individual is appointed to act

in the office of superintendent must not exceed one year, but the individual may be reappointed with the prior approval in writing of the Minister.

Minister’s approval3 The Minister may refuse to approve an

appointment or reappointment of a superintendent if the provisions of the employment contract relating to that position, including any provision governing termination of the contract, are not acceptable to the Minister.

Severance allowance4 (1) Where

(a) an individual ceases to be a superintendent by reason of resignation or termination or non-renewal of the individual’s appointment or employment contract, and

(b) the board pays a severance allowance to that individual,

the severance allowance shall not exceed one year’s salary.

(2) For the purpose of subsection (1), “severance allowance” does not include vacation pay or a reasonable relocation allowance.

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Expiry5 For the purpose of ensuring that this Regulation

is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on August 31, 2015.

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ANNOTATED

EMPLOYMENT CONTRACT

FOR

SCHOOL SUPERINTENDENTS

JIM DAVIES

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ANNOTATED EMPLOYMENT CONTRACT FOR SCHOOL SUPERINTENDENTS

Purpose Comprehensive written employment contracts provide both employer and employee an opportunity to set out very clearly the respective rights and benefits of each party. A good contract will address all areas of potential concern with clarity -- ambiguity is not a virtue in a contract. A clear and comprehensive written contract is especially important for senior employees, with whom the employer must have an open and frank relationship. Sensitive areas such as salary increases, termination of the contract, moving expenses, termination pay and the like cannot be left to negotiation when they arise. That would only undermine the close relationship that must exist between the senior employee and the employer.

No relationship is more important to a school board than the one it has with its superintendent, and thus the annotated employment contract set out in the following pages was prepared with that position specifically in mind. However, the intention of creating it was to assist all of the members of the College of Alberta School Superintendents (CASS), which of course includes many individuals who do not occupy the chief superintendency, and thus the contract is readily adaptable to other circumstances. I also hope the contract will be useful to school boards. My belief is that if both sides to the contract better understand the issues and the meaning of the contract language, negotiation of appropriate agreements will be less stressful for all.

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Organization An entire employment contract specifically designed for school superintendents is contained in the following pages. Most of the sections contain alternative provisions <contained within arrows like this phrase is> in contemplation of various individual circumstances. Each part of the contract is followed by an annotation entitled “Commentary”, which provides explanatory material as to the purpose of that part, alternatives available, and suggestions as to the legal and tax implications of the alternatives. Use CASS members are free to use and alter the contract to create contracts for their own jobs. In order to make this more convenient, CASS will provide an unannotated electronic version free of charge to every CASS member who wants one. The same goes for Alberta school boards.

The Disclaimer I hope the annotated contract is of real benefit to you, and forms the foundation of clearer and better employment relationships in the future. However, particular fact situations will demand changes to the contract. There’s no such thing as one-size-fits-all in employment relationships, and when that occurs I would encourage you to get appropriate legal and tax advice. I cannot give you legal advice through a booklet and I don’t purport to.

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EMPLOYMENT AGREEMENT

BETWEEN

THE BOARD OF TRUSTEES OF <>(the “Board”)

and

<>

(the "Superintendent")

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Commentary. The purpose of this section is to identify the parties to the Agreement. There are many styles of doing this, some quite ornate and perhaps humorous to today’s eyes, but nothing of legal import turns on the stylistic attributes. In addition to identifying the parties, each is given a defined name for convenience of expression.

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WHEREAS:

1.Section 113(1) of the School Act, RSA 2000 c.S-3 requires the Board to appoint an individual as superintendent of schools;

2.Section 113(1) of the School Act, RSA 2000 c.S-3 prohibits the Board from appointing an individual as superintendent of schools for a period exceeding five years; 3.Section 113(1) of the School Act, RSA 2000 c.S-3 requires the Board to obtain the approval in writing of the Minister of Education prior to appointing an individual as superintendent of schools; and 4.The Board and the Superintendent have agreed to enter into an employment relationship in accordance with the School Act, RSA 2000 c.S-3 for their mutual benefit, whereby the Superintendent shall become superintendent of schools for the Board;

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THIS AGREEMENT WITNESSES that the parties have agreed that the terms and conditions of the employment relationship shall be as follows:

Commentary. This section is called the preamble. The “whereas” statements are called recitals, and their purpose is solely to recite the facts that lead to the Agreement in the first place – to set out the context of and foundation for the Agreement so that some third party (perhaps a judge) will be better able to understand why the parties entered into the Agreement. Recitals are not intended to have legal import beyond that, and are in my view generally unnecessary, particularly in employment agreements, for which the reason and intention are pretty obvious. I would generally omit them, but set them out here for your general information. The last sentence is just a grammatical transition from the preamble to the meat of the Agreement.

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ARTICLE ONE - CONDITIONS OF EMPLOYMENT

Commentary. My drafting style is to group related issues under a general heading and then list each topic under a more specific heading. None of this is necessary. You don’t need headings or section numbers at all if you don’t want them. The “olde English” style of drafting was to use no headings and write in huge extended sentences with extensive use of semi-colons rather than periods. I think that style is hard to read and makes it difficult to locate specific topics.

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1.1 Appointment. The Superintendent is hereby appointed by the Board to the position of superintendent of schools. The Superintendent acknowledges that reappointment of the Superintendent as superintendent of schools is by law subject to the prior approval of the Minister of Education and cannot be for a term greater than five years. The Superintendent accepts the appointment on the terms and conditions set forth in this Agreement.

Commentary. It is useful to have specific acknowledgement of the fact and terms of the appointment and acceptance, and agreement as to the relationship being governed by the Agreement, although some would argue that this is unnecessary because these could be inferred by the fact of signing the Agreement.

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1.2 Duties and Authority. The Superintendent shall undertake the duties and exercise the powers of superintendent of schools and act in any other offices to which the Superintendent may be appointed by or at the direction or request of the Board. The Superintendent will be the chief executive officer of the school district and in charge of the administration. The Superintendent will inform the Board of significant actions of the administration and advise the Board on any matter pertaining to its deliberations. The Superintendent shall be responsible and accountable to the Board for the total operations of the Board, having general responsibility for advising the Board of matters arising in all areas of Board jurisdiction, for recommending policies to the Board for these areas, and for implementing those policies adopted by the Board.

Commentary. This section could be replaced with much more specific language if desired. My view is that at least general recognition of the scope of responsibilities is very useful for both parties.

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1.3 Term. The Board shall employ the Superintendent as superintendent of schools from <>, 200<> until <>, 200<>, subject to earlier termination in accordance with the provisions hereunder.

Commentary. This is the first absolutely essential section. Both parties must agree to the length of employment, and this must be specified so that it is clear that the Agreement conforms with the School Act restrictions on length.

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1.4 Evaluation. The Board shall evaluate the performance of the Superintendent <yearly> OR <by <> of each year>. The evaluation shall be carried out in accordance with the procedures <agreed to by the Board and the Superintendent from time to time> OR <specified in Schedule “A” hereto>.

Commentary. Private-sector CEO’s have the luxury of justifying pay increases in good years by reference to economic performance of the company. In bad times, they have the comfort of the cushion provided by the fact that most private-sector boards consist of a majority of members that are beholden to the CEO for their appointment to the board. Not so school superintendents. Evaluation is necessary, if only for political reasons, but particularly so if there is to be any form of performance increment. There is provision for the parties to specify a date for completion of the evaluation, and an alternative for those who would like to leave timing issues to be dealt with more informally. As to whether or not to actually specify the evaluation document in the Agreement, this too is a matter of individual preference and circumstance. A lawyer’s point-of-view would be that a specific evaluation document should be agreed to before employment commences and should form part of the Agreement, as contemplated by the second alternative. However, it may be impossible to agree to such a detailed document prior to hiring in many circumstances, and of course there will be many superintendents and boards who would prefer the more adaptable and collegial features of the first, even if a detailed document could be worked out in advance.

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1.5 Covenants of the Superintendent. The Superintendent covenants both during and after employment with the Board that:1.5.1 except in fulfillment of the Superintendent’s duties

hereunder, the Superintendent shall not enter into any contract on behalf of, or in the name of, the Board, and shall not pledge the credit of the Board;1.5.2 the Superintendent shall not at any time be guilty of any act or conduct causing or calculated to cause damage or discredit to the reputation or business of the Board;1.5.3 the Superintendent shall not at any time during the

Superintendent’s employment with the Board or within 6 months after the termination thereof take any steps or make any approach either directly or indirectly to any employee of the Board calculated to lead to such employee l eaving his or her employment;1.5.4 as soon as notice of termination of employment has been given by either party and or the Superintendent’s employment with the Board shall terminate, whichever is the earlier, the Superintendent shall deliver up to the Board all books, records, printouts, lists, notes and other documents or copies thereof relating to the business of the Board which may be in the Superintendent’s possession or directly or indirectly under the Superintendent’s control;

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1.5.5 the Superintendent shall not at any time during and/or after employment use for the Superintendent’s own interest and shall not release directly or indirectly to anyone any information concerning the Board’s business practices, operations, procedures, policies, budget, products, financial information, client names, suppliers, etc., which the Board shall deem confidential or against its business interests; and1.5.6 the information found in the Board’s books, records,

printouts, lists, notes, or any other documents or copies thereof relating to the business of the Board is the exclusive property of the Board and can only be used for the benefit of the Board.

Commentary. Section 1.5.1 sets up a contractual obligation not to financially oblige the board except for board business. Brach of this provision could provide grounds for termination for cause. Section 1.5.2 is a type of deportment clause, reflective of the fact that the superintendent’s behaviour in the community can dramatically influence what community members think of the board. Section 1.5.3 is a non-solicitation clause, preventing a departing superintendent from taking other key members of the administration away. Section 1.5.4 is a return-of-property provision, while 1.5.5 and 1.5.6 prohibit exploitation for personal gain of the board’s intellectual property.

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ARTICLE TWO - REMUNERATION AND BENEFITS Commentary. Individual circumstances will vary, as will employment contracts. The following sections outline an array of possible ways for a Board to compensate its Superintendent. It is not expected that all of them will apply. However, both parties to the employment contract will do a better job if they are aware of what’s available to be included.

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2.1 Salary. <In this Agreement, the Superintendent’s “annual salary” shall mean the sum of <$> paid directly to the Superintendent in monthly installments and the cost of indirect payments made on the Superintendent’s behalf to the provider of various benefit plans made available to the Superintendent pursuant to this Agreement in section 2.2. Adjustments to the direct payments> OR <The Superintendent shall be paid a salary of <$> per year. Adjustments to salary> shall be on <> of each year of this Agreement <in accordance with the annual cost of living adjustment figures shown in the Alberta Consumer Price Index, or mutually agreeable comparable index in the event that no such figures are available through the Alberta Consumer Price Index for the year in question> OR <by reference to the general principle of fairness and specific factors such as increases in remuneration of school superintendents in other jurisdictions, public-sector pay increases to senior officials, the performance of the Superintendent as reflected in the Superintendent’s performance evaluation, increases in the cost of living generally in Alberta, and other factors to which the parties may agree from time to time.

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Commentary. Specification of salary is fundamental to an employment agreement. This Agreement attempts to give the Superintendent a greater severance payout by defining the cost of benefits as part of the Superintendent’s salary, remembering that the Superintendent of Schools Regulation limits severance payouts to “one year’s salary”. Benefit programs are just another form of compensation and the cost of them is routinely paid out to terminated employees. Since it is a significant amount of money, I have attempted to include benefit premiums as part of salary. I must emphasize that the Minister of Learning might not approve a contract that provides for this, in which case it would have to be changed. I do not think that making benefit premiums a part of salary would increase your taxes, but I advise you to get specific tax advice on this matter.

Of course, if your contract does not provide for severance, or you do not wish to entertain the uncertainties I have referred to, then the second alternative should be used, which is quite conventional.

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Timing of adjustments is important, although some superintendents and boards would prefer not to specify a date, as is contemplated here. That is fine, so long as the adjustment is at least annual. Dealing with how to arrive at appropriate adjustments is one of the most difficult things to handle. I recommend against the first alternative given here, which is a simple cost-of-living (COLA) clause. It can over-reward in some years, and under-reward in others. The first is politically difficult and potentially dysfunctional to the organization, and the latter is unfair to the superintendent and unwise for the board that wishes to keep a superintendent. The second alternative is very flexible and can be adapted to unique circumstances. I strongly recommend against use of any reference to settlements with other staff groups in determining what adjustments the Superintendent will get. The Superintendent must be seen to be free of self-interest in dealing with salary issues for other board employees.

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2.2 Benefits. <The Board shall provide to the Superintendent all benefits (“Benefits”) provided by the Board from time to time to other senior employees of the Board.> OR <The Board shall pay on behalf of the Superintendent the entire premiums for the most comprehensive and highest level benefits (“Benefits”) available under the benefit plan in place from time to time for other senior employees of the Board.> OR <The Board shall pay on behalf of the Superintendent the entire premiums for the following benefits (“Benefits”) <list>.> There shall be no entitlement to payment for any benefits provided under this section after termination or expiration of this Agreement except as provided for herein.

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Commentary. Various alternatives to the provision of benefits are possible. The first consideration is whether the Agreement should require the Board to provide the actual benefits as provided for in the first alternative, or just to pay the premiums as provided for in the second. This seemingly trivial distinction is actually potentially very important for both parties. For example, if the Superintendent is dismissed and is subsequently successful in a wrongful dismissal action against the Board, a court could reach dramatically different conclusions as to the Board’s liability depending on which section is used. With the first alternative, if the Superintendent could show a loss greater than the amount of the premiums, the Board’s liability could be greater than the cost of those premiums. Perhaps the result would be different with the second or third alternatives. The distinction could be particularly important in cases involving the death of the Superintendent after dismissal, because in some situations employers have been found liable not just for the amount of premiums they ought to have paid for a life insurance policy during the period of notice of dismissal, but for the entire amount the employee’s estate would have been paid under the lapsed policy. The wording could be very important to both parties, and they should carefully consider the consequences of adopting one or the other.

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Another distinction between the first two alternatives is whether the Board will provide benefits equivalent to that of other senior employees of the Board, or even higher levels if available under the plan utilized for those employees. Note that there is no provision for the Board to utilize a unique benefits carrier for the Superintendent. If that is the wish of the parties, then the benefits to be purchased should be specified as in the last alternative. The final sentence of the section is not just for clarity, but is also an attempt to protect Boards from post-termination liability for benefits like life insurance In other words, it’s for the benefit of the employer, not the employee.

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2.3 Continuation of Benefits. If the Superintendent begins receipt of pension under the Teachers’ Retirement Fund (“Pension”) within 31 days following cessation of employment with the Board for any reason other than termination for just cause, the Board shall pay the premiums on behalf of the Superintendent for all Benefits available for retired employees of the Board until the Superintendent ceases to be in receipt of Pension or becomes 70 years of age, whichever occurs first.

Commentary. Benefits continuation after retirement is very valuable. For the Superintendent on the last leg of employment which is eligible for TRF pension, this is an attractive addition to the Agreement. For the Board interested in a Superintendent who will finish out his or her career with the Board, this section represents a potentially significant inducement. The choice of 70 years as a cut-off is arbitrary.

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2.4 Reimbursement of Expenses. The Board shall reimburse the Superintendent for all expenses actually and properly incurred by the Superintendent in connection with the performance of duties under this Agreement, including fees, transportation, food and lodging, or attending educational or professional conferences, seminars and other meetings, subject to the provision by the Superintendent of receipts, statements and vouchers to the satisfaction of the Board.

Commentary. I like the generality of this section, but I appreciate that there are divergent views on this. There is no provision for limitation on how many trips the Superintendent may take or the destination. Some boards wish to specify these, or at least set parameters. I advise Boards against paying for spouses to accompany the Superintendent on trips, as is provided for in some contracts. The spouse is not an employee and it is difficult to legally justify such an expenditure by the Board.

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2.5 Club Fees. Recognizing the requirement for entertainment and social activities in furtherance of the interests of the Board by the Superintendent, the Board will provide for initiation/transfer fee, share price, and annual dues payments for one health or luncheon club, subject to the provision by the Superintendent of receipts, statements and vouchers to the satisfaction of the Board. The club shall be of the Superintendent's choosing, subject to the approval of the Board as to cost.

Commentary. There are many benefits to both parties from having the Superintendent belong to a club. What sort is most appropriate will depend on the community and the Superintendent’s desires.

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2.6 Sabbatical Leave. The Superintendent shall be entitled to <x> weeks of sabbatical leave in each twelve months of employment under this Agreement, and to a prorated entitlement for periods of less than twelve months. Sabbatical leave may be taken at the discretion of the Superintendent, with due regard to the requirements of the Board. Sabbatical leave entitlement <shall> OR <shall not> accumulate. USE ONLY IF ACCUMULATION IS PROVIDED FOR <Upon termination or completion of this Agreement, the Superintendent shall be paid a sum equivalent to the total number of days of accumulated entitlement multiplied by <1the daily wage of the Superintendent for the period in which each day of entitlement was earned> OR <2 the average daily wage of the Superintendent over the total period of service rendered under this Agreement> OR <the average daily salary of the Superintendent during the last twelve months of service under this Agreement>.>

Commentary. Sabbatical entitlement is commonplace in education and can certainly be defended as appropriate for superintendents. If the Board wants to induce the Superintendent to take the sabbatical leave after cessation of employment rather than during it, accumulation and payout is provided for. Attention should be paid to the three alternatives provided for calculating the amount of the payout. Contracts that don’t address this issue with precision serve neither party well.

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2.7 Professional Organizations. The Board shall <pay> OR <reimburse the Superintendent> for all fees related to membership in appropriate professional organizations, OPTIONAL <subject to the prior approval of the Board >.

Commentary. It is desirable for the Superintendent to maintain appropriate professional ties. This section provides alternate methods of payment, leaves the choice of organizations to the Superintendent, and provides an alternative that allows the Board to reject a membership if it wishes.

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2.8 Vacation. The Superintendent shall be entitled, for each twelve months of service as superintendent of schools, to <> weeks (pro-rated for periods of service less than twelve months) of vacation.

Commentary. Unlike other benefits, vacation entitlement is statutory and thus payout of unused portions does not have to be provided for in the Agreement. The Employment Standards Code requires it. As to an appropriate number of weeks, six is standard but seven is not uncommon.

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2.9 Vehicle. The Board shall, at the commencement of the term of appointment and <every two years thereafter> OR <at such other times as determined by the Board in consultation with the Superintendent>, provide the Superintendent with a new full-size, mid-range vehicle of the Superintendent's choosing, and shall pay for all operating costs and repairs for such vehicle, subject to the provision by the Superintendent of receipts, statements and vouchers to the satisfaction of the Board. OPTIONAL <The Superintendent may purchase the vehicle from the Board at book value <when a new one is purchased> OR <at the end of the Superintendent’s employment by the Board.> OPTIONAL <Upon proof satisfactory to the Board that the Superintendent has paid income tax in respect of an assessed taxable benefit for the personal use of the vehicle, the Board shall pay the Superintendent an amount equal to the amount of such tax paid.>

Commentary. The term “vehicle” is used instead of “automobile” because of the increasing popularity of SUV’s and other trucks. The provision of a vehicle is very common and should be basic to the superintendency. Two-year turnover of the vehicle is fairly common but not universal, so an alternative is provided. Alternatives for the purchase of the vehicle are provided as well, although this is less common. Since the vehicle will be a taxable benefit, some superintendents ask for reimbursement of income tax paid on the benefit, which is an alternative provided for. Remember that this payment will also be taxable as income.

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2.10 Retiring Allowance (Retention Incentive). Upon completion of the term of this Agreement as specified in section 1.3, the Board shall pay to the Superintendent a retiring allowance (“Retiring Allowance”) equivalent to the Superintendent’s annual salary, calculated at the rate of pay of the Superintendent at the time of cessation of employment. If legislation limiting the amount that may be paid by the Board to the Superintendent upon cessation of the Superintendent’s employment is revised, the Retiring Allowance shall the maximum permissible under the revised legislation. If such legislation is repealed or expires, the Retiring Allowance shall be a sum equal to two times the Superintendent’s annual salary, calculated at the rate of pay of the Superintendent at the time of cessation of employment.

Commentary: Section 4 of Regulation 2/99 (The Superintendent of Schools Regulation) allows a maximum severance allowance of one year’s salary upon resignation, termination or non-renewal of a superintendent. No such limitation applies to other employees. For purposes of clarifying what the payout should be, the section references the current salary of the Superintendent rather than the vague “one year’s salary” used in the Regulation. Use of that phrase could lead to needless dispute: for example, if a contract provides for yearly salary increases and the Superintendent resigns on the last day of the fourth year of a five-year contract, does the agreement provide for payment of the annual salary for the fifth year, when the payment will actually be made, or the fourth, when the resignation was delivered, or an average of both years? Uncertainty is not a virtue in contracts.

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As well, recall that one alternative under section 2.1 is that all benefit premiums are defined as part of the “annual salary”. This section will work appropriately whether or not that choice is made.

An attractive alternative for those who will not be obtaining alternative employment is the continuation of those benefit programs which can be continued after employment ceases. Payment of these premiums by the Board is contemplated as a benefit in section 2.3.

Note that the payout is characterized as a retiring allowance. While retiring allowances are taxable as income, there are three potential advantages to the Superintendent in such characterization and no disadvantages to the Board. The advantages are:$2000 per year of service prior to 1996 may be

transferred to an RRSP (and perhaps other amounts – consult your tax advisor) you might be able to attribute the income to a year

prior to the year of receipt, which may have tax advantages for some legal fees related to the recovery or establishment of

the retiring allowance are tax- deductible, which means that not all of a retiring allowance should be transferred to an RRSP if legal fees have been incurred, as the deduction will be lost.

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Provision is made for the retiring allowance payable to be increased in the event of revision, repeal or expiry of the Regulation.

Some districts prefer to characterize a retiring allowance as a retention incentive, perhaps pro-rating the amount payable according to the number of years the superintendent stays with the board, or making completion of the whole term a precondition to any payment.

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2.11 Deferred Salary. <The Board shall pay to the Superintendent a bonus in the amount of <$> at the time requested by the Superintendent, except that such payment shall not be payable if it is not to be paid more than three years after cessation of the employment of the Superintendent by the Board, or if the cessation of employment if the Superintendent is a result of termination for just cause.> OR <Provided that it is allowed under the Income Tax Act, the Board shall upon request enter into an arrangement with the Superintendent such that the Superintendent may defer payment of a portion of salary for up to six years and be paid interest by the Board on the unpaid amounts at the rate paid by the Board to its banker.

Commentary. While the Income Tax Act generally requires taxation of income in the year in which it is earned, it does allow a tax deferral of up to 3 years or less on a bonus, which is contemplated by the first alternative. The second alternative contemplates the self-funded sabbatical so prevalent in education.

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2.12 Sick Leave. The Superintendent shall be credited with <x> days of sick leave entitlement upon commencement of this Agreement, and shall earn <x> days of additional entitlement for every <x> days of service thereafter. Sick leave shall accumulate, OPTIONAL <and any unused accumulated entitlement shall be paid to the Superintendent after termination of this Agreement, calculated at the daily rate of pay earned by The Superintendent during the last month of service prior to termination.

Commentary. The Board should provide sufficient initial sick leave entitlement to bridge the Superintendent to its long-term disability plan, should disaster strike in the early stages of employment. Additional entitlement should be earned according to some reasonable formula. One day per week is common. Payout of sick-leave entitlement on termination of the contract is an alternative provided for because it is a very attractive benefit. It may be eligible for rollover into an RRSP, it is a relatively invisible severance payment, and it induces the Superintendent to forgo taking days off during employment. Calculation of the dollar value of an unused sick day is based on the latest daily wage of the Superintendent, even though the entitlement might have been earned during a period of lower pay. To do otherwise is to invite needless calculation problems.

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2.13 Relocation Expenses. The Board shall pay the Superintendent a relocation allowance of <$> to move to the district the Board serves OPTIONAL <and a relocation allowance of <$> at the cessation of employment with the Board provided that the cessation of employment is not a consequence of dismissal for just cause>.

Commentary. Actual relocation expenses are fully tax deductible, and thus a relocation allowance is an attractive incentive for a Superintendent who has to move to take a new job. Relocation expenses at both ends of the contract are doubly attractive. They are a fine benefit for the retiring Superintendent, and for the Superintendent heading elsewhere for employment, they offer the opportunity to negotiate other valuable provisions with the new employer in lieu of relocation expenses. The dollar value of relocation expenses should be carefully considered. Boards should strive for clauses that provide for reimbursement of actual expenses. Superintendents should strive for clauses that provide for a specific amount. Twenty-five thousand dollars is a reasonable allowance in many circumstances.

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2.14 Performance Bonus. The Board shall pay to the Superintendent a performance bonus in accordance with the provisions of Schedule “B”.

Commentary. Performance bonuses are relatively new to the education field and fraught with difficulties. Some superintendents are agreeing to unreasonable contractual demands in return for bonuses that are miniscule in comparison to private-sector bonuses. I don’t recommend them at this time, so I have not developed a schedule outlining how one might be structured.

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2.15 Ancillary Technology. The Board shall provide the Superintendent with the following ancillary technology items:<>

Commentary. It is difficult to suggest specific items for inclusion in this section because technology is changing very quickly. Certainly in today’s world, the Superintendent should be provided with a minimum of a computer at work and at home, a projector for power-point presentations, a cell phone, and a personal organizer. It is an open question what might be standard tomorrow.

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2.16 Personal Effects and Services. The Board shall upon presentation of satisfactory proof of purchase, reimburse the Superintendent for the full cost of OPTIONAL <all items of business apparel>, OPTIONAL <briefcase> and OPTIONAL <luggage>, OPTIONAL personal grooming services>, OPTIONAL <health-related services not covered by the benefits provided to the Superintendent under section 14>, and OPTIONAL <include any other items agreed to>.

Commentary. Superintendents lead busy and frequently very public lives. They need to look and feel good, and it is therefore not unreasonable to expect that the Board will provide those amenities that will assist them in this regard. This section can be adapted to individual needs. The Superintendent who needs regular massage or chiropractic therapy to cope with the rigours of the job ought to be compensated for them.

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2.17 Life Insurance. The Board shall <prepay> OR <pay as they come due> the premiums on a policy of <term> OR <whole> life insurance (“Policy”) on the Superintendent’s life, such Policy to remain in force until <date> OR <the death of the Superintendent>. The Policy shall provide for payment of $<> following the Superintendent’s death OPTION TO BE USED ONLY WITH WHOLE LIFE POLICY <and have a cash surrender or maturity value of $<>>.

Commentary. This section provides alternatives for the Board to prepay or maintain payments on a term or whole-life policy (discussed below) of specific value on behalf of the Superintendent for a specific period of time, including a period following termination of employment. If there is no prepayment, the Agreement should specify that the obligation to pay survives termination of the Agreement. Otherwise, that obligation would cease upon termination of the Agreement. Since the value of the premiums paid by the employer will be a taxable benefit, tax advice should be sought as to whether prepayment is appropriate in a particular situation.

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The Board-paid life insurance is a significant benefit, particularly as we age, because premiums typically escalate dramatically once the insured reaches his or her mid-fifties. Since premiums are generally not tax deductible, maintaining adequate life insurance in later years can be very difficult, particularly in retirement. The benefits of life insurance are many, particularly for those with dependents who may need replacement income or help with education expenses upon your death. Insurance proceeds are not taxable, and if you name specific individuals as beneficiaries rather than your estate, the proceeds will not be available to creditors who may have a claim on your estate. While the insurance industry has created many different products, two types -- term, and whole life (sometimes called permanent or universal life) -- predominate. The section may be adapted to either type. An alternative to this section would be to incorporate by reference a policy already agreed upon by referring to it in the section and attaching it as a schedule to the agreement. Term insurance premiums are far lower than those for

whole life. Most policies have termination provisions at age 70 (some 75), but some companies offer policies with termination at higher ages. The advantage of term insurance is that for the same level of premium as for a whole life policy, the insured can purchase much more coverage. The disadvantage is that nothing is paid under a term policy if you do not die while the insurance is in place. (Admittedly, most people have difficulty seeing this as a disadvantage when they apply it to themselves!)

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Whole life policies combine insurance with investment, and will mature with a specific cash value at a specified time. They are sometimes criticized for providing comparatively low investment returns, and very low amounts of coverage when compared to term policies with equivalent premiums. However, there are advantages. The insured can cash out or borrow against the cash value, while the life insurance remains intact. If a specific beneficiary is named in the policy, the cash surrender value can be sheltered from creditors because the proceeds on the policy will not be part of the insured’s estate. If the beneficiary is a charity, premiums will be tax deductible if the policy is donated to the charity (ie. legal ownership of the policy is transferred to the charity). Therefore, if the insured maintains such a policy past the time during which the Board is paying the premiums, the policy should be donated to the charity immediately.

Whole life insurance policies might be the best way to provide for a supplementary pension. Not only are the products varied enough to meet most individual circumstances, but the terminology “life insurance” is much less politically sensitive than “supplementary pension”, even though the cost to the Board may be the same. Still, for those who wish to have a separate supplementary pension clause, some alternatives are set out in the next section.

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2.18 Supplementary Pension. The Board shall make contributions to the supplementary pension plan outlined in Schedule “A”.

Commentary. Supplementary pension schemes are becoming increasingly common. The reason is that the Income Tax Act imposes a limit on the pension that may be paid by a registered pension plan. While this limit is increasing, it is still below the salary of many superintendents. In response to this situation, perhaps as much as a third to a half of private-sector employers have instituted supplementary pension plans. The Alberta Government instituted one for management employees in 1999.

The ASBA has instituted a supplementary pension plan that many boards have subscribed to. The ASBA plan contemplates different plans, including retroactivity for the uncapping portion of the pension. Thus, the details for each individual will vary, and should be scheduled.

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2.19 Pension Indemnity. The Board shall pay the Superintendent annually a sum that is equivalent to the payments made by the Superintendent to the Teachers’ Retirement Fund over that period.

Commentary. It is commonplace for

organizations to pay a CEO’s pension contributions. This section merely provides the same benefit for school superintendents.

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2.20 Discretionary Allowance. The Superintendent shall have an allowance of <$> per year to spend at the Superintendent’s discretions OPTIONAL <without the necessity of providing receipts of expenditures.>

Commentary. Discretionary allowances are acceptable, but the option of not having to provide receipts is not recommended. Some contracts stipulate that part of the allowance is a “non-taxable” expense allowance. This characterization is of dubious value since it is irrelevant to the taxation authorities.

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2.21 Education Expenses. The Board shall pay for all tuition, travel, and other associated expenses related to the Superintendent pursuing studies toward a doctoral degree.

Commentary. This is a valuable inducement for some Superintendents.

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2.22 Northern Allowance. The Board shall pay the Superintendent the sum of <$> for travel to the nearest large Canadian city and <$> for necessary travel for medical services not available locally.

Commentary. In addition to the special

deduction of 20% of net income available to northern residents, a deduction is available to offset the taxable benefit of two paid trips per year to the nearest large Canadian city and unlimited travel for medical services not available locally. It only makes sense for northern residents to take advantage of this to the extent possible.

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2.23 Death Benefit. In recognition of the Superintendent's service with the Board and additionally in settlement of the Superintendent's accumulated sick-leave entitlement, the Board will upon the death of the Superintendent pay a death benefit in the amount of $<> to the Superintendent's spouse. Such payment shall be made as quickly as possible and in any event not later than 7 calendar days following the date of the Superintendent's death. If at the time of such payment the Superintendent's spouse is deceased, the death benefit shall instead be paid in equal shares to Employee's surviving children.

Commentary. It is possible to provide for a direct payment from the employer to the spouse or children of a deceased employee, so the complications and time involved in running money through an estate are eliminated. More about the subject is in IT-508R on the CCRA website. It explains that a death benefit of up to $10,000 may be made by an employer to a deceased employee's spouse or children tax free. Any amount over $10,000 is taxed.

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2.24 Indemnity. The Board shall indemnify the Superintendent in respect of any expenses incurred by the Superintendent in the performance of the Superintendent’s duties under this Agreement. Such indemnification shall apply only to expenses actually incurred and not otherwise indemnified or reimbursed to the Superintendent under a policy of insurance or otherwise under this Agreement.

Commentary. A superintendent is protected by section 144.1 of the School Act, which provides as follows:Section144.1(1) Trustees, employees of a

board and school council members are not liable for any loss or damage caused by anything said or done or omitted to be done in good faith in the performance or intended performance of their functions, duties or powers under this Act or any other enactment.

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This is not comprehensive protection, however, as it applies only to acts or omissions done in good faith and in the performance or intended performance of the superintendent’s functions, duties or powers. These elements must be proven before the protection of the section kicks in. The only way they are proven is at trial. This means that legal fees, likely significant, will have to be expended to prove this. Those fees should not fall to the superintendent to pay. Ordinarily, they would be paid by the district’s insurer, but all insurance has gaps in its coverage. Therefore, it is possible that a particular claim will not be covered, and the superintendent would have to pay legal fees to prove the applicability of section 144.1. Thus it is important for an indemnity to be in place to cover this eventuality. Many districts provide such protection by way of board resolution, but it can also be done by way of a contractual provision like this one. Note that the last few words of the clause make it inapplicable to expenses otherwise reimbursed.

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ARTICLE THREE - TERMINATION OF EMPLOYMENT

3.1 Termination for Just Cause. Notwithstanding anything contained in this Agreement to the contrary, the Board retains the right to terminate the employment of the Superintendent for just cause without notice. Prior to such termination, the Board shall convene a meeting of the trustees to consider the matter, excluding all persons except the Board's legal counsel, secretary, the Superintendent and the Superintendent's legal counsel, and any persons necessary to provide evidence regarding the matter of the meeting. If the decision is in favour of termination, the Board shall give its decision and reasons therefor in writing.

Commentary. Few organizations would want to go through the difficulties inherent in terminating a CEO for just cause, but a process is specified just in case. If the Board has just cause to terminate, it may do so without giving notice or pay in lieu of notice. Establishing just cause is generally not easy, however, unless the Superintendent commits some serious breach of obligation or demonstrates behaviour that essentially repudiates the contract or so damages the relationship that it cannot reasonably continue. Where general performance is at issue, it will be very difficult for the Board to prove just cause. Generally, that takes time and abundant evidence. The process can be so dysfunctional to the organization that most the Boards don’t even bother to attempt it with respect to senior people, and instead rely on a reasonable provision in the contract allowing termination by the Board without cause by payment of a prescribed severance allowance, as is set out in section 3.2.

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3.2 Termination on Notice. The Superintendent may terminate employment with the Board without cause or providing reasons therefor, by giving the Board <> months’ written notice of termination. The Board may at any time terminate the employment of the Superintendent without cause or providing reasons therefor by paying the <x months’ salary> <the > Retiring Allowance to the Superintendent. In such case, the Superintendent shall have no right to attend a meeting of the Board or make representations to it regarding the termination.

Commentary. In almost all cases, utilizing this section to terminate the employment of a Superintendent would be preferable than relying on just cause. The Superintendent should give the Board a reasonable amount of notice. Three months would be minimal.

Some Superintendents have negotiated contracts that contain a clause allowing them to choose to take a principalship (or other “suitable “ position in the District or Division) instead of a payout.

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ARTICLE FOUR - GENERAL CONTRACT PROVISIONS

4.1 Governing Law. The terms of this Agreement are governed by the laws and shall be construed by the courts of the Province of Alberta.

Commentary. This section protects Boards from having to sue a former superintendent outside Alberta. It can be vexatious and expensive to have to pursue litigation in other provinces, and particularly so in other countries.

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4.2 Severability. If any provision contained herein is determined to be void, invalid or unenforceable in whole or in part for any reason whatsoever, it shall not be deemed to affect or impair the validity or enforceability of any other provisions hereof, and such unenforceable provision or part thereof shall be treated as severable from the remainder of this Agreement.

Commentary. Occasionally, a court will find some provision of agreement void or unenforceable because it is contrary to law or public policy. Penalty clauses in construction contracts are one example. This section prevents the whole Agreement from becoming invalid just because of the single offending provision.

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4.3 Entire Agreement. This Agreement and any schedules attached hereto constitute the whole of the agreement between the parties.

Commentary. A short section, but very important. Remember those comforting words that the Board’s representative said to you last week? They mean nothing with this section in the Agreement.

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4.4 Amendments. No modification, amendment or variation hereof shall be of effect or binding upon the parties hereto unless agreed to in writing by each of them and thereafter such modification, amendment or variation shall have the same effect as if it had originally formed part of this Agreement.

Commentary. This means that the Agreement can be changed, but only if both parties formally agree to the change in writing.

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4.5 Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective legal personal representatives, heirs, executors administrators or successors.

Commentary. This little section is actually very important. It ensures that if the Superintendent dies, his or her estate will be entitled to enforce payment of any amounts owing. It also ensures that any successor to the Board (a trustee appointed by the Minister, a new district upon amalgamation, etc.) will be bound by the Agreement.

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4.6 Assignment. This Agreement is personal to the Superintendent and may not be assigned by the Superintendent.

Commentary. This means, for example, that the Superintendent can’t assign the Agreement to a personal holding company.

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4.7 Non-Waiver. No waiver by the parties hereto of any breach of any condition, covenant or agreement hereof shall constitute a waiver of such condition, covenant or agreement except in respect of the particular breach giving rise to such waiver.

Commentary. This means that if a party grants an indulgence to the other party, that doesn’t mean that they are not entitled to strictly enforce the provisions of the Agreement the next time.

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4.8 Time of the Essence. Time is of the essence of this Agreement.

Commentary. This means that when the Agreement specifies something relating to timing (like when a payout is supposed to be made), it’s serious.

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4.9 Timing of Payouts. To the fullest extent permissible in law, the Board shall pay all amounts payable to the Superintendent under this Agreement at the time and in the manner requested by the Superintendent in writing.

Commentary. Income tax obligations and other personal considerations can dramatically affect the value of payments made to the Superintendent, but rarely affect the Board in any significant way. This section obliges the Board to comply with the Superintendent requests for timing of payment of such things as retirement allowances, sick leave payout, and the like. It is a virtually no-cost way for the Board to add value to the agreement with the Superintendent.

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IN WITNESS WHEREOF the parties have duly executed this Agreement as of the _____ day of ______________, 201__.

The Board of Trustees of <>

Per: ____________________<>

____________________Superintendent

1 annotated employment contract for school superintendents and second level leaders jim davies...

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