PSAC strikes compensation deal with the federal government
140,000 public service workers to receive a $2,500 lump sum
OTTAWA — Canada’s largest public service union has reached a compensation deal with the federal government for the payroll chaos caused by its disastrous Phoenix system.
The Public Service Alliance of Canada announced Friday that it has negotiated a damages agreement that will give 140,000 public service workers a $2,5000 lump sum payment for the Phoenix fiasco. The money will go to all members whether directly or indirectly affected by Phoenix.
“This new agreement is a substantial improvement from the one negotiated by other federal bargaining agents,” the union said in an update released Friday morning. “This new agreement will help make our members whole for over four years of hardship caused by the Phoenix pay system.”
The compensation deal offers PSAC members a $2,500 lump sum payment, improvements to the current claims process for out-of-pocket expenses and financial losses, and the ability to pursue damages for major financial losses incurred because of Phoenix.
Eligible union members will received $1,000 in compensation for the 2016-17 fiscal year, and $500 for each of the three subsequent years. A member is eligible for the designated amounts as long as they were employed for at least three months of that year.
The union said it believes the money should be tax free, but it has asked the Canada Revenue Agency to rule on that question.
The PSAC deal means all grievances related to general damages or the late implementation of collective agreements will now be withdrawn.
The government has negotiated different Phoenix packages with other federal unions that represent 146,000 current and former public servants. Those deals offer 1.25 days of paid leave per year for every union member who has worked for the government since 2016.
That deal allows federal employees to take the paid leave in cash, but that meant, PSAC said, that the offer was much more valuable to civil servants at the top end of the salary scale. It rejected the deal as too meagre and inequitable.
Based on its own surveys, PSAC estimates that 90 per cent of federal public servants have been affected by mistakes on their paycheques: overpayments, underpayments and other errors. The federal public service has 273,000 employees, about 41 per cent of whom work in the National Capital Region.
In a report on what led to the fiasco, former auditor general Michael Ferguson said a small management team within Public Services and Procurement Canada failed to obtain independent advice about the system, paid little heed to the concerns of end users, ignored mounting risks, stripped key software features from the system when faced with escalating costs, and failed to test the system as a whole.
A report last year by the federal comptroller-general estimated Phoenix could take five years and $3.5 billion to fix.