Question Period Note: Phoenix-related issues (Damages)

Implementation status of the Phoenix damages agreements reached with unions in 2019 and 2020.

•All public servants deserve to be paid for their work in an accurate and timely manner, and we recognize that the implementation of the Phoenix pay system has had an impact, directly or indirectly, on many current and now former employees.
•Damages agreements have been reached with all bargaining agents and aim to compensate employees for damages caused by the Phoenix pay system in the core public administration and other agencies.
•As part of these agreements, there are claims processes to help those who had financial costs and lost investment income and experienced severe damages, in addition to the provision of general compensation.

In May 2019, the Government of Canada reached a tentative agreement with members of the Senior Level Phoenix Union-Management sub-committee on damages for compensation for employees impacted by the implementation of the Phoenix Pay system. This agreement was ratified in June 2019 by all federal government bargaining agents except for PSAC. Separate agencies have signed similar agreements covering their employees (except those represented by PSAC).

The Public Service Alliance of Canada (PSAC) rejected the agreement, stating that the compensation was insufficient.

June 2019 Damages Agreement (all bargaining agents except PSAC)

The agreement reached with bargaining agents (with the exception of PSAC) in 2019 applies to up to 121,000 current and 25,000 former employees.

The agreement includes up to five days of additional annual leave for employees and a cash pay-out equivalent to this leave for former employees or the estates of deceased employees. In February 2020, a claims process was added to provide compensation to current and former employees for financial costs or lost investment income. A claims process for severe personal or financial hardship was launched in January 2021.

2020 PSAC Damages Agreement

The damages agreement was signed with PSAC in October 2020. The PSAC agreement is similar to the June 2019 agreement with the exception of the general damages provided to employees, which consist of cash payments of up to $2,500 instead of leave credits. This includes an additional lump sum of up to $1,000 for the late implementation of the 2014 collective agreements.

The other claims processes for financial costs or lost investment income as well as severe personal or financial hardship are identical.

General compensation for the PSAC agreement was provided to current employees in March and September 2021 and former employees will be able to claim this compensation through a soon-to-be launched claims process in December 2021. Other claims processes for former and current employees were launched on November 16, 2021.

As part of the agreement signed in October 2020 with the PSAC, the parties agreed to make payments on a best effort basis and the government proceeded with those payments as per the terms of the agreement. The agreement also mentions that applicable deductions would be applied.

The Treasury Board Secretariat sought an interpretation on the taxability of the payments from the Canada Revenue Agency (CRA), who administers Canada’ s tax laws for all Canadians.

The CRA confirmed that these payments are taxable and the Employer deducted taxes from the payments in accordance with this interpretation.

2021 Agreement of the catch-up clause related to the June 2019 MOA

The negotiation of the catch-up agreement ratified on March 3, 2021 was triggered following the signing of the PSAC damages agreement in the fall of 2020. The purpose was to align the compensation, as some elements of the 2020 PSAC agreement differed from the agreement negotiated with other bargaining agents in 2019.

Current and former employees covered under the 2019 damages agreement may be eligible for other monetary benefits that are part of the PSAC damages agreement, such as general damages compensation of up to $1,000 for the late implementation of the 2014 collective agreements.

This catch-up agreement applies to about 112,000 current employees and 19,300 former employees/estates of former employees covered under the 2019 damages agreement.

Current employees represented by the PSAC who received leave under the 2019 agreement as a result of working in positions outside of PSAC during the period covered by the agreement, have also received their outstanding catch-up payments.

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