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‘Common-sense’ demands: unions want Tax Act exemption, more staff to deal with Phoenix

It may be a new year, but the two largest federal public service unions continue to fight the Phoenix pay system woes.

Public Service Alliance of Canada national president Robyn Benson is calling on the government to compensate Phoenix-affected members by coming to an agreement on damages, and giving them a tax exemption if they have been overpaid by the troubled pay system, among other initiatives.The Hill Times photograph by Andrew Meade

PUBLISHED :Wednesday, Jan. 10, 2018 12:00 AM

Imagine someone gives you $30, but you only see $20 of it because of extenuating circumstances. Then they want $30 back, leaving you with $10 less than you started with.

On a much larger scale this is what public service employees are experiencing as a result of the troubled Phoenix pay system, which has left many of the government’s 300,000 workers overpaid, underpaid, or not paid at all.

According to federal law, if an overpayment is given back within the tax year it was issued, only the net payment (what was received after deductions) needs to be repaid. If it is in a different tax year, which is now any public servant who was overpaid in 2017, then they owe the gross overpayment. The overpayments would be worked out come tax time, but in the meantime it could leave public servants thousands of dollars in the hole.

The overpayment issues is just one of five Phoenix-related focuses of the Public Service Alliance of Canada—the 180,000-member federal public service union—for 2018.

  

“[The demands are] all very common-sense in my mind, but I don’t know for sure [inside] the government,” PSAC national president Robyn Benson told The Hill Times in late December.

Employees experiencing overpayments must report them by Jan. 19 so the government will only take back the net amount. PSAC considers this a half-step to solving the issue.

Ms. Benson, formerly of the Canada Revenue Agency, said the government should change the Tax Act to allow an exemption for public servants to pay back the net amount at any time once they’ve reached “steady state,” which is the government term for people being paid properly, on time.

Nicolas Boucher, media relations officer for Public Services and Procurement Canada (PSPC), said it will not begin recovering overpayments until after employees have received their returns, which allows the government to first adjust tax accounts to take into consideration the deductions it’s owed.

  

“Employees who are in an overpayment situation will be notified and will be given options to repay the government through a lump sum or instalments, by cheque or payroll deduction,” he said in an emailed statement.

The government’s latest numbers indicated there were 27,000 overpayment open cases as of August 2017, but unions said there are likely more. 

“We acknowledge that many employees have been waiting for their transactions to be processed,” said Mr. Boucher. “This is completely unacceptable.”

Along with addressing overpayment recovery, PSAC is asking the government to recognize that employees are owed damages due to Phoenix, dedicate staff to helping decipher members’ pay and figure out what they are owed, and stop the recoveries of emergency salary advances until everyone has reached a steady state.

  

PSAC also wants to increase the number of compensation advisers in both the Public Service Pay Centre, the central office that processes most employees’ pay stubs, and in government departments. The Pay Transformation Project, which started in 2009, included two parts: configuring off-the-shelf payroll software to government systems, known as Phoenix, and moving compensation advisers generally found in the National Capital Region to Miramichi, N.B., known as the Public Service Pay Centre.

Debi Daviau, president of the Professional Institute of the Public Service of Canada, one of the largest public sector unions in the country, discusses the troubled Phoenix pay system during an appearance at the National Press Theatre in Ottawa on Nov. 14. The union continues to advocate for an alternative pay system. The Hill Times photograph by Andrew Meade

Meanwhile, the Professional Institute of the Public Service of Canada (PIPSC), which represents over 57,000 federal professionals and scientists, will continue its quest to convince the government to let its members build an alternative pay system. President Debi Daviau told The Hill Times PIPSC also supports PSAC’s initiatives.

“We’re hopeful that the government is looking at [the alternative system] based on the comments we’ve had from PSPC,” she said, adding officials said they are not married to the system.

Launched in February 2016, the Phoenix pay system was supposed to save the government about $70-million annually, but so far the Liberals have sunk about $400-million into fixing it. Despite the expense there looks to be no end in sight, with auditor general Michael Ferguson predicting in his fall report on Phoenix it will cost far more than the $540-million the government plans to spend.

There are a total of 589,000 open cases, referred to as “transactions,” waiting to be processed at the Miramichi Pay Centre, according to the latest “dashboard” update, which tracks the backlog. This includes 415,000 cases with financial impact, and 54,000 collective agreement implementation cases, as well as several thousand others. One person may have more than one case.

 

Emergency salary advances clawed back too soon

More than half of public servants have experienced some sort of pay issue, according an October dashboard update.

“There [are] … those who want to retire and unable to retire because they can’t figure out if they’ve got the accurate monies in there,” said Ms. Benson.

If an employee is underpaid and in financial need, the government has set up a program so they can get emergency salary advances. This program is not working sufficiently, said Ms. Benson, because the government is asking for the repayment too soon.

“When the emergency payment is given, it’s collected off the first available monies,” said Ms. Benson. “What we’re saying to government is you need to wait until everyone is at the steady state.”

If someone is given an advance, it is collected off the next paycheque, said Ms. Benson, meaning “you don’t get the cheque you should have gotten—they’ll take that cheque, that second payday, take that money from you so you’re sitting with nothing.”

 

Not just about people, system needs to be fixed, too: unions

A member of the Union of National Employees local 70130 chants and waves flags as hundreds of government employees rally outside of the Prime Minister’s Office on Oct. 12, 2017, calling for the government to fix the Phoenix payroll system. The Hill Times photograph by Andrew Meade

PSAC has long said the government needs to increase capacity to effectively deal with the backlog. 

The union wants more bodies specifically to help public servants determine whether money is owed to them by examining their paycheques, which changed under the Phoenix system.

“Because there has been so much in terms of the up and downs, the no payments, some payments, and the way that the new paystub looks, there is no way for you to figure it out accurately,” Ms. Benson said.

Mr. Boucher said approximately 380 employees have been hired in the last six months, mainly to process pay transactions and implement collective agreements. Another 300 employees are expected to start at the pay centre this month to further increase pay processing capacity.

“[In February 2016] there were 550 compensation staff at the pay centre,” he said. “As of today, there are 1,203 employees working at the pay centre in Miramichi and in satellite and remote offices supporting government pay activities across the country.”

“People power” as Ms. Benson calls it, can only go so far, as the system itself needs fixing. Up to 60 PIPSC members are working on solving the reported 1,000 computer bugs along with other IT staff, but the union said there has been too much system patchwork done to be stabilized and eventually upgraded.

“What my members are telling me is that it’s not fixable, it’s too far gone,” Ms. Daviau said, meaning they are continuing push for an alternative system developed by federal IT workers.

The new system would be built while Phoenix is still running, and then eventually switched over, which Mr. Ferguson said he doesn’t believe is a viable option.

Ms. Daviau noted she feels Treasury Board is a partner in solving Phoenix, as it advocated for unions to be present. With PSPC, she said it’s “kind of like they’re still protecting their turf a bit.”

Mr. Boucher said the government “is committed to stabilizing the pay system and is exploring longer-term options to ensure we have a sustainable, reliable and efficient pay system.” He also pointed out the measures taken already to stabilize the system, such as conducting a third-party, independent study.

ehaws@hilltimes.com

The Hill Times