Phoenix pay system damages agreement (2020)
Agreement between the Treasury Board of Canada and the Public Service Alliance of Canada (PSAC)
- The objective of this agreement is to make whole the members of the Core Public Administration in PSAC bargaining units (“employees”) who have been, and continue to be, harmed by the Phoenix Pay System.
- For greater certainty, this agreement does not apply to members of the class action as certified by the Québec Superior Court in Bouchard c. Procureur Général du Canada (200 06 000214 174), or to others that may be added by the court.
- The parties agree to the following plan for the compensation of damages to employees who have suffered financial and non financial damages due to issues with their pay caused by the Phoenix Pay System. The parties have designed this process to minimize the impact on the Phoenix Pay System and to provide compensation to all affected employees expeditiously. Employees who work with the Phoenix Pay System are only covered by this agreement insofar as they have had issues with their pay caused by the Phoenix Pay system.
- The agreement covers damages for the following four (4) fiscal years: 2016/2017, 2017/2018, 2018/2019 and 2019/2020 and late implementation of 2014 collective agreements.
- All current employees covered by this agreement are eligible for and will receive financial compensation in accordance with the amounts, conditions and timing set out in this agreement, in recognition of the fact that they have been impacted, directly and/or indirectly, by the implementation of Phoenix. The financial compensation outlined in clause 11, 16 and 19 constitutes general damages for stress, aggravation, and pain and suffering incurred.
- This agreement also sets out the compensation framework for former employees. Former employees and estates of deceased employees will be eligible to file claims in respect of matters addressed in this agreement. Following the submission of a claim and validation, former employees and the estates of deceased employees, will receive financial compensation equivalent to that of current employees.
- Current and former employees who have suffered exceptional and severe cases of financial and non financial damages as a result of Phoenix pay issues will be entitled to those damages set out under the heading Damages for Severe Impacts and Other Demonstrable Cases.
- Where a current or former employee has received compensation for damages in another forum, for example, as a result of a grievance or complaint stemming from a claim for workplace injury benefits, the amount of damages for severe impacts and other demonstrable cases that they receive under this agreement may be reduced by the amount of the compensation (in money or in kind) that they have received in that other forum.
- The entitlements in clauses 11, 16 and 19 are to be paid only once per employee (or former employee) per fiscal year (whether as a current employee or former employee) of the CPA, or of a separate agency.
- The failure to apply for an emergency advance or priority payment will not be a barrier to current or former employees making a claim for damages for severe impacts and other demonstrable cases. Mitigation measures taken by the Employer shall be considered in reaching a decision on a claim for damages for severe impacts and other demonstrable cases. For example, the receipt of an emergency salary advance or priority pay shall be considered in reaching a decision on a claim for damages for severe impacts and other demonstrable cases.
General compensation for current employees
- The Employer will compensate all current employees with a lump sum payment of $1,000 for 2016/2017 and $500 for each of the 2017/2018, 2018/2019 and 2019/2020 fiscal years in general damages as compensation for stress, aggravation, and pain and suffering and for the late implementation of 2014 collective agreements. For reference, $200 per year ($400 in 2016-17) pertains to late implementation of 2014 collective agreements, as applicable.
- In order to be eligible for the financial compensation provided for in clause 11, an employee need only be on strength for one day in the fiscal year to which a lump sum payment pertains. For greater clarity, the term “on strength” refers to all employees employed in the CPA, whether or not they are on leave, assignment or otherwise not active.
- The financial compensation provided in clause 11, will be provided to current employees on a best effort basis by the Employer.
- For greater certainty, nothing in this agreement diminishes employees’ entitlements to compensation pursuant to their collective agreement. The entitlement in clause 11 is also without prejudice to the right of the employees or Bargaining Agent on behalf of their members to seek compensation for interest, aggravation, and lost time in subsequent fiscal years to those cited above, for events attributable to those subsequent years.
- Employees eligible under this agreement who may also be eligible under the damages agreement signed by other Bargaining Agents shall only receive one entitlement whether as a current employee or former employee of the CPA, or of a separate agency for any given fiscal year.
- Notwithstanding clause 15, PSAC and TBS recognize that any leave already credited to employees under the Damages Agreement signed with other bargaining agents, will not be revoked. For the purpose of clauses 15 and 16, the cash equivalent value of a day’s leave will be considered to be $300. Any difference in excess of $10 between the cash equivalent of leave provided under the other Damages agreement and the cash equivalent value of $300 per day identified in this clause will be paid where it benefits the employee.
- The parties recognize that for the purpose of consistency of application across the public service in assessing employee status and entitlements to general compensation during the period covered by the agreement, Phoenix data as of the date of signature of the agreement will be used. To mitigate changes in entitlements due to pending pay transactions, TBS will establish a process to permit an employee to seek an adjustment to payments under this agreement due to the processing of a pending pay transaction.
- Any monies paid pursuant to clause 11 are subject to applicable statutory deductions, if any, and are non-pensionable.
General compensation for former employees
- Former employees will be eligible, following the submission of a claim and validation, to be compensated on the basis of clauses 11 and 16.
- In order to be eligible for the payment provided for in clause 19, a former employee need only to have been on strength for one day in the year to which a lump sum payment pertains. For greater clarity, the term “on strength” refers to all employees employed in the CPA, whether or not they are on leave, assignment or otherwise not active.
- Any monies paid pursuant to clause 19 are subject to applicable statutory deductions, if any, and are non pensionable.
Claims process for expenses and financial losses
- The entitlement under the existing claims process for expenses and financial losses due to Phoenix will remain in place until there are no more claims to process. It will continue to provide redress and reimbursement for all damages and expenses which are currently compensated through the claims process.
Damages for severe impacts and other demonstrable cases
- Unless otherwise specified, a threshold of $1,500 will apply with respect to claims for severe impacts and other demonstrable cases as outlined in clause 24.
- In addition to compensation provided in clauses 11, 16, 19 and 22, in order to address situations involving an employee’s own pay problems, employees will be able to file claims and the Employer will engage in a detailed review of claims to determine if the claims disclose the following:
- Non speculative investment losses related to the Phoenix Pay System, where evidenced by a pre existing public investment instrument which was cashed in whole or in part at the time an employee was impacted by unpaid earnings due to the Phoenix Pay System. Compensation is to be commensurate with investment income lost during the unpaid period up to the sums equivalent to missed net pay;
- Non speculative lost RRSP deferred taxation advantages, subject to specific conditions. Compensation is to be commensurate with tax advantages lost during the unpaid period calculated on sums up to the equivalent of the missed net pay (including delayed net severance or pension payments where such delay is caused by the Phoenix Pay System);
- With respect to delayed severance or pension payments where such delay is caused by the Phoenix Pay System, any interest on outstanding amounts on loans, mortgages, credit cards or other debt instruments where the outstanding amount is up to the net amount of the delayed severance or pension payment less the portion of the delayed net severance or pension payments applied to calculate the amount payable pursuant to clause 24(b);
- For current employees documented use of sick leave, and other paid or unpaid leave caused by illness, stemming from issues with the employee’s pay attributed, to the Phoenix Pay System shall be re credited and/or compensated. The $1,500 threshold does not apply to this sub clause;
- For former employees, documented use of other paid (except for sick leave) or unpaid leave caused by illness, stemming from issues with the employees’ pay attributed to the Phoenix Pay System, shall be compensated. The $1,500 threshold does not apply to this sub clause;
- Interest attributable to the Phoenix Pay System, at the rate of the Interest and Administrative Charges Regulations on:
- all delayed severance payments, beyond what would be a normal established processing time (within thirty (30) days of receipt of severance pay annex);
- all delayed pension entitlements, beyond what would be a normal established processing time (goal is to process the pension benefit division payment within one hundred and twenty (120) days of the date the application is approved or within forty five (45) days of receipt of all required documents, whichever is later);
- missing pay.
- The Employer agrees to apply retroactively to February 2016, section 17 of the Directive on Terms and Conditions of Employment (emergency replacement pay services or priority pay for individuals beginning disability insurance, maternity or parental leave). The $1,500 threshold does not apply to this sub clause;
- Claims alleging a discriminatory practice as defined under the Canadian Human Rights Act, including but not limited to issues related to maternity, parental or disability leave, which may warrant additional damages being awarded;
- Claims in respect of the consequences of lost occupational capacity, lost security clearances, bankruptcy or significant credit rating impact which are directly attributable in whole or in part to their Phoenix Pay problems, in order to compensate the consequences thereof;
- Claims in respect of employees who resigned from the public service as a consequence of a loss of income leading to financial hardship caused by the Phoenix Pay System;
- Claims in respect of mental anguish or trauma, which interfered with the ability of the employee, to a profound degree, to lead a normal life; caused in whole or in part by the Phoenix Pay System; and
- Other damages which are in the nature of the above, for situations which disclose comparable personal hardship or impact caused in whole or in part by the Phoenix Pay System.
- The Employer will rely on all relevant information in reviewing damages for severe impacts and other demonstrable cases, including information held by department(s) or agency(s) where an employee was employed.
- A decision with respect to a claim under this agreement shall constitute a final level grievance decision. For the purpose of referring a claim to the FPSLREB for adjudication, a claim under this agreement shall constitute a grievance at that point.
- Employees may only grieve the denied portion of their claim/grievance for damages for severe impacts and other demonstrable cases in accordance with the grievance process established under this agreement.
- The Employer will provide a decision with respect to a claim within two (2) years of receipt of the necessary information needed to make a decision. The time frame may be amended with the mutual consent of the parties. This clause shall not come into effect until the claims office is established.
- An employee whose claim has been approved will be required to sign a release form. It will only be effective for the portion of the claim that is approved.
- Grievances for damages resulting from the Phoenix Pay problems that were filed prior to the date of this agreement coming into force and which have not been resolved will be processed pursuant to this agreement.
- Grievances for damages resulting from the Phoenix Pay problems that were filed after the date of this agreement coming into force shall be processed pursuant to this agreement.
The Adjudication of Grievances
- Claims can only be referred to the FPSLREB for adjudication once a decision has been made; or the time period in clause 28 has expired; or upon the mutual consent of the parties.
- The Bargaining Agent retains the right to refer a final level grievance decision made under this agreement to adjudication where the bargaining agent has carriage of the grievance per article 209(2) of the FPSLRA.
- The Employer will not seek to enforce any objections of timeliness with respect to the grievance process until two (2) years from the date of the signature of this agreement.
- Grievances arising out of clause 24 (a to c, f) shall be argued by way of written submissions, except where it is determined by the adjudicator, or on consent of the parties, that either viva voce and/or oral arguments are required for a proper determination of the merits of the grievance.
- Grievances arising out of clause 24 (d, e, g to k) may be argued by way of written submissions, where the parties agree or where the adjudicator determines that it is in accordance with the principles of natural justice to dispense with viva voce evidence, and oral argument.
Bargaining Agent’s obligations
- The Bargaining Agent must review and evaluate, prior to an employee filing a claim, all existing grievances submitted by their members in a manner consistent with their duty of fair representation. The Bargaining Agent will make reasonable efforts to complete this review within one hundred and eighty (180) days of implementation of this agreement.
- Where the Bargaining Agent has carriage over an existing grievance, and that matter has been resolved, the Bargaining Agent will withdraw those grievances within one hundred and eighty (180) days of the implementation of this agreement.
- The Bargaining Agent agrees to withdraw all related grievances (individual, group and policy), Unfair Labour Practices and any other litigation related to damages, and the late implementation of the 2014 collective agreements. In addition, the Bargaining agent will not support or pursue new litigation with regards to these matters.
- The parties agree to create an oversight committee to oversee and facilitate the implementation of this agreement.
- The committee will be established within ninety (90) days of the signature of this agreement. The committee will be comprised of an equal number of Employer and PSAC representatives, not exceeding 8 members.
- The committee’s objective is to resolve issues related to the implementation of this memorandum of agreement. The committee will not review substantive matters related to individual claims and grievances.
- The committee will work towards establishing an accelerated adjudication process for grievances under this agreement. The parties may utilize alternative dispute resolution processes such as mediation and/or the process outlined under section 223(2) of the FPSLRA if mutually agreed.
- Current employees: are individuals employed under the Public Service Employment Act that are indeterminate or terms of more than three (3) months on the date of signature of this agreement and who were eligible during the period covered by this agreement.
- Former employees: are individuals who were employed under the Public Service Employment Act either on an indeterminate basis or for a term of more than three (3) months during the period covered by this agreement and who have resigned, been terminated, retired or become deceased (estates of deceased employees) before the date of signature of this agreement.
This agreement is made without prejudice to the rights of the Bargaining Agent in respect of:
- Damages suffered by employees working with the Phoenix Pay System, for example by compensation advisors, which are not covered by this agreement;
- Damages or other corrective measures in respect of the consequences of the Phoenix Pay System with regard to the processing of dues;
- The application for judicial review filed before the Federal Court of Canada on December 19, 2016.
This agreement is made without prejudice to the rights of individual employees in respect of their rights under the Canadian Human Rights Act.
This agreement, as well as any public communications related to it, is subject to conclusion of a tentative collective agreement with the Program and Administrative Services (PA) group.
The parties recognize that final agreement is subject to approval by the Employer and the Bargaining Agent’s governing body.
Dates may be extended by mutual agreement of the parties.
For the Bargaining agent:
Public Service Alliance of Canada
For the Employer:
Assistant Deputy Minister
Employment Conditions and Labour Relations
Treasury Board of Canada Secretariat
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