Implementation of Retroactive Rates of Pay
The purpose of this bulletin is to provide departments with direction to apply a change in the method of implementing retroactive rates of pay for all employees.
In 1999, as a result of the 1992 Public Service Staff Relations Board (PSSRBM) Lajoie Decision (File # 166-2-20731/32) and the subsequent Federal Court of Appeal decision (# A-894-91), departments were instructed to apply the Lajoie decision. The decision essentially stated that when new rates of pay come into effect retroactively, there should be no recalculation of pay but rather a straight down move into the new pay scales. This method of applying retroactive rates of pay has remained in effect for represented employees since that time.
As a result of recent PSSRBM decisions concerning the implementation of retroactive rates of pay, the Treasury Board Secretariat and some of the bargaining agents have signed Letters of Understanding (LOU) relating to the implementation of retroactive rates of pay.
Effective June 2, 2003, the new provisions are applicable to all employees in organizations listed in Schedule I, Part I of the Public Service Staff Relations Act, represented by a bargaining agent who has signed the LOU, when implementing retroactive upward revisions in pay rates. In other words, when these employees become subject to new collective agreements, they will be entitled to the better of:
- a recalculation of the rate of pay as was applied prior to 1992, or
- the straight down revision of the rates of pay (the method used for Lajoie).
This new method of calculating is not retroactive and applies only to collective agreements signed after the signature of the Letter of Understanding, (i.e. after ).
For the implementation of the retroactive rates of pay for these new collective agreements it will be necessary to review all appointments and salary-related benefits (e.g. overtime, extra-duty, leave and termination payments, pension) made during the retroactive period of each agreement and give the employee the better treatment of straight down or recalculation. Please note that it may also be necessary to adjust any subsequent appointments and salary changes.
These new provisions shall also apply for excluded and unrepresented employees, including executives, effective June 2, 2003, to coincide with the coming into force of this change in application for represented employees.
Attached you will find a series of questions and answers that will help your advisors with the implementation of retroactive rates of pay.
All grievances regarding the application of retroactive rates of pay, which have already been submitted and are, either at adjudication or are being held at a level in the departmental grievance process, should be reviewed individually on their merits with a Staff Relations representative and the grievor and/or their representative with a view to resolving them without further recourse to a third party. Respective departments and bargaining agents are currently being contacted in this regard.
Departmental Compensation and Staff Relations managers should direct any questions that they may have to their corporate Compensation or Staff Relations officials who, if need be, can contact the Pay Administration Section.
Original signed by
Labour Relations and Compensation Operations
Human Resources Management Office
Application of Retroactive Rates of Pay
Q1. Do the Letters of Understanding (LOUs) change the method of implementing retroactive rates of pay for current or previous collective
No. Departmental personnel should not review the implementation of retroactive rates of pay and salary-related benefits for current or previous collective agreements. The revised provisions apply to collective agreements signed after the signature of the LOU i.e. after .
Q2 To whom do the LOUs apply?
Each LOU applies to:
- employees in a group represented by the bargaining agent who signed the LOU, and
- employees appointed in the retroactive period to a group represented by that bargaining agent.
Q3. What rules apply to employees represented by a bargaining agent who has not yet or does not sign one of these Letters of Understanding?
The provisions will apply only once the bargaining agent LOUor once they are negotiated in the new collective agreement.
Q4. Does this new implementation method for retroactive rates of pay apply to casual employees and employees hired for a specified period of less than three (3) months?
Yes. Employees hired for a specified period of less than three months and casuals hired under section 21.2 of the Public Service Employment Act (PSEA) who are employed in one of the groups where a LOU was signed are entitled to receive retroactive remuneration in accordance with the new method of implementation of retroactive rates of pay.
Q5. Does this new application for retroactive rates of pay
Yes, effective June 2nd, 2003, the policy change will apply to excluded and unrepresented employees, including Executives.
Q6. Will employees be entitled to the new application of retroactive rates of pay if they were:
- on acting assignment during the retroactive period into a group where a LOU has been signed for that group, or
- acting in an excluded or unrepresented group during the retroactive period.
Yes, the new method of implementation of retroactive rates of pay applies to acting assignments.
Q7. Will employees who are salary protected be entitled to the new method of implementation of retroactive rates of pay?
Yes. Please note that when determining whether or not salary protection ceases or continues when new collective agreements are signed, the two maximums must be compared as of the effective date of the revisions (in the two positions). If one of the collective agreements has expired and the new rates have not yet been established as of that effective date (the new collective agreement has not yet been signed) then the employee is not taken out of salary protection until current valid rates can be compared against current valid rates. Once the rates for both groups and levels are based on current valid rates of pay (neither rate is based on rates from an expired collective agreement), then the maximums are compared to determine whether salary protection ceases or continues.
Q8. Is the Public Works and Government Services (PWGS) pay system able to automatically deal with this change in application of retroactive rates of pay?
The PWGS pay system will continue to process the revisions using the straight down method. Departments will be required to review all appointments and salary-related benefits (e.g. overtime, extra-duty, leave and termination payments, pension) made during the retroactive period to ensure the employees receive the better of the recalculation or straight
Q9. Will departmental personnel have additional time to implement new collective agreements?
Employees must continue to receive all adjustments within the legislated or negotiated implementation period (e.g. for most collective agreements, 90 days from the date of signature of the collective agreement or the date the arbitral award is rendered). Where the recalculation method provides the better benefit to the employee, departmental personnel will be PWGS pay system.
Q10. Will the Treasury Board be providing additional salary dollars in order to implement this change in application?
No. The change in application does not affect the current Treasury Board process of fund allocation as a result of implementing new rates of pay. When new rates of pay are authorized, Treasury Board allocates funds to departments based on a formula to cover the additional salary cost.
Q11. Will all the grievances regarding retroactive rates of pay and Lajoie be settled now?
The LOUs will provide for the recalculation of all appointments and salary-related benefits for employees made during the retroactive period of each new collective agreement. All current grievances regarding the method of implementation of retroactive rates of pay, which have already been submitted and are either at adjudication or are being held at some level in the departmental grievance process, should be reviewed individually on their merits with Staff Relations and the respective grievor or their bargaining agent representative with a view to resolving them without further recourse to a third party. Respective departments and bargaining agents are currently being contacted in this regard.
- Date modified: