Phoenix Pay System Settlement Reached for Federal Workers

A Phoenix pay system settlement has been reached awarding all eligible members with a one-time payment of $2,500. The Phoenix pay system is the payroll processing system for federal government employees in Canada. The Public Service Alliance of Canada (PSAC) reached the deal with the federal government on July 9, in which 140,000 public service workers will be awarded damages due to problems caused by the Phoenix pay system.

The Phoenix pay system has been highly problematic over the years and has caused thousands of employees to be underpaid, overpaid, or never paid. Many federal workers faced financial hardships for months, while the government tried to prioritize a huge inventory of payroll issues. 

The Phoenix pay system settlement includes changes to claims for out-of-pocket expenses and other financial losses associated with the deficient payroll program. The deal includes additional compensation for severely impacted individuals. 

The faulty Phoenix pay system affected some workers in severe cases, including causing some to acquire major outstanding debts due to missed payments, or some workers who ended up losing their vehicles or homes as a direct result of being paid on an inconsistent or even non-existent basis.

All eligible members of the Phoenix pay system settlement who have been directly or indirectly affected by the precarious Phoenix pay system are due to receive a $2,500 one-time payment, instead of five days of leave, which was previously proposed.

The new Phoenix pay system settlement provides relief for employees who have dealt with financial difficulties over the last four years.

The one-time payment of $2,500 general compensation includes damages for the long wait that workers had to endure while the government worked to reach mutual agreements over the years. Collectively, the payment includes $1,000 for the year 2016-2017 and $500 for each of the three years that the workers had to wait for the settlement to be reached. 

Any worker who is in the process of receiving claims for additional out-of-pocket expenses or other financial losses should continue their claims process. The government is continuing to fulfill these claims as they receive them. 

All workers, including previous federal workers or their estates, are qualified to be compensated the designated amount for each year they were employed, the union says. 

“All employees represented by PSAC will receive compensation for the toll that the Phoenix pay system has had on their lives. This is a testament to our commitment to reaching fair and equitable agreements, mindful of today’s economic and fiscal context,” Treasury Board President Jean-Yves Duclos said. 

“This new agreement is a substantial improvement from the one negotiated by other federal bargaining agents,” said PSAC in a statement. Other federal unions have already agreed to offering impacted members an additional five days of paid sick leave, but PSAC calls that offering “meagre,” and not equitable as it “rewarded the highest earners and punished those with lower wages when cashed out.”

The Phoenix pay system settlement also covers employees who have suffered severe damages in the amount of $1,500 or more. Claims can be made for several significant damages resulting from delayed or missing pay including, but not limited to: 

• Accrued interest on outstanding for loans, mortgages, credit cards, or other debts.
• The use of sick leave or other paid or unpaid leave for sickness (the $1,500 threshold does not apply)
• The loss of security clearance due to bankruptcy or lowered credit rating.
• Forced resignation from the public service because of financial difficulties.
• Interruption of normal life due to grief and trauma caused either solely or partially because of the Phoenix pay system.

In February, the federal government took part in an agreement to reimburse some of its workers that were affected by the Phoenix pay system inconsistencies. Under the terms of the Phoenix Pay System Agreement certain current and former employees who suffered losses greater than $1,500 would be able to make claims for cash as well as additional leave days.

Some current and previous workers who were impacted by financial losses over amounts of $1,500 were eligible to file a claim for compensation, on top of extra leave days, per the terms of the Phoenix Pay System Agreement. Workers who were allowed to engage in the Phoenix Pay System Agreement only applied to a select number of employees and those workers were not allowed to also participate in the Phoenix pay system class action lawsuit. 

According to the PSAC, when the full details and timeline of the Phoenix pay system settlement is ready for distribution it will be made available to all its members.

Top Class Actions will post the settlement information and claim filing instructions once they become available. Click on the “Follow Article” at the top of this page to get the latest updates about the Phoenix pay system settlement by using your free Top Class Actions account. For the latest updates, keep checking ca.TopClassActions.com or sign up for our free newsletter.

Are you a federal employee that was affected by the Phoenix pay system irregularities? Tell us your story in the comment section below! 

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