Severance Pay

Date: August 29, 2007

To:: Heads of HR

cc: Chiefs of Compensations
Chiefs of Labour Relations

On May 4, 2007 the Employer granted a Policy Grievance on the method of calculating severance pay benefits for employees governed by all Professional Institute of the Public Service (PIPS) collective agreements.

The grievance allowed that severance pay calculations are to take into consideration the complete period of continuous employment and not be limited to the maximum number of weeks per year of complete continuous employment for which an employee can receive the severance benefit.

As a result of this decision, effective May 4, 2007, severance pay benefits governed by PIPS collective agreements are to be calculated as follows:

• Establish under which circumstance the employee is to be paid the benefit;
• Establish the employee's complete period of continuous employment;
• Determine if employee had already received severance pay, retiring leave or a cash gratuity in lieu of retiring leave;
• Where, within a period of continuous employment, an employee was not previously paid a severance pay benefit, retiring leave or a cash gratuity in lieu of, the severance pay benefit is granted within the limits stipulated in the employee's relevant collective agreement.
• Where, within a period of continuous employment, an employee had previously been paid a severance pay benefit, retiring leave or a cash gratuity in lieu of leave, the period of continuous employment for which the employee has already received severance pay is to be subtracted from the calculation of continuous employment used in the calculation of the new severance pay benefit. Upon completion of this new calculation, new severance pay benefit is to be paid in accordance with the employee's relevant collective agreement within the respective limits.

Important Note:

In the case of all other collective agreements, it is imperative that the employee's relevant collective agreement be referred to when establishing severance pay benefits as not all collective agreements are written in the same language as the PIPSC's agreements.

Departmental Compensation and Labour Relations Managers should direct any questions that they may have to their appropriate corporate officials who, if need be, can contact the Pay Administration Section.

This announcement is available on the Treasury Board Secretariat Web site at: Human Resources Information Notices

Original signed by
Hélène Laurendeau

Assistant Secretary
Labour Relations & Compensation Operations