Civil service unions in Canada have signed a deal to compensate more than 146,000 government employees hit by the failure of the government’s Phoenix payroll system.
Unions have accepted an offer by employer representatives to grant up to five days’ annual leave to union members who worked in the country’s public service between 2016-17 and 2019-20, along with promises to compensate those who suffered financial loss.
Last year, a damning report by a Senate committee found that more than half of the federal government’s 290,000 public servants had experienced pay problems after the introduction of the Phoenix system, “causing significant anxiety, stress and hardship”.
Hols for hassle
Greg Phillips, president of the Canadian Association of Professional Employees, said: “At the end of this exercise, we concluded that it was in our members’ best interest to sign this agreement and give them access to a fast-track process to urgently get compensated for financial and non-financial damages caused by Phoenix.”
The deal will see two days of annual leave granted to union members working in the public service during 2016-17, when the system was introduced. An additional one day will be granted for each subsequent year, regardless of whether or not they were affected by the Phoenix issues.
Joyce Murray, president of the Treasury Board and minister of digital government, said: “We believe in making this right for all employees and recognize the real mental and emotional stress, and financial impact that the Phoenix pay system has had on public servants.
“These pay issues are completely unacceptable and we are committed to treating employees fairly and to compensating those impacted.”
Cash in compensation
Cash payments will be available for former employees and the estates of deceased employees, the government confirmed.
Additional compensation will be provided for those who missed opportunities to earn interest on savings or investments, paid interest on debt due to delayed payments, and others who experienced severe hardship. These cases will be evaluated on a case-by-case basis, the government said.
A joint statement by a group of unions, representing professions including pilots, lawyers, dockyard workers and researchers, said: “It is important to recognize that this agreement in no way absolves the employer of its obligations to pay out any outstanding monies owed to the hundreds of thousands of public servants who continue to face issues with their pay, nor does it remove the employer’s obligation to stabilize the current payroll system and continue work to find its replacement as quickly as possible.”
The deal was rejected by one union – the Public Service Alliance of Canada – which called the offer “meagre”.
In a statement, the union said: “Our union will not trade in four years of our members’ pain and suffering for a settlement that does not adequately compensate for the terrible toll Phoenix has had on their lives and that of their families.”
More than half of Canada’s public servants are estimated to have had their pay disrupted by Phoenix, with some underpaid, some overpaid and some not paid at all.
The centralised system, which was meant to save the taxpayer C$70m (US$52m) per year, has racked up additional costs of more than C$900m (US$668m) on efforts to solve the problems.
Now to try again
After the announcement of the deal with unions, a report from Canada’s independent watchdog the Parliamentary Budget Officer estimated the cost of implementing a replacement payroll system for Phoenix at C$57m (US$42m) up to 2025.
It said that the new system would cost C$340-352 (US$252-261) to run per year for each member of staff, compared to C$1,073 (US$797) under Phoenix.
In an interview with Global Government Forum in February, Alex Benay, Canada’s chief information officer, described the project’s failure as “a catalyst to doing things differently.” “So many things went wrong: design, procurement, project management approach, possibly culture,” he said. To build the new system, he explained, his team is doing “the opposite of what was done [at the project’s outset in] 2008: breaking the process into smaller deliverables; engaging vendors right from the beginning; putting users at the centre of everything, and letting them test what we’re doing.”