FAQ: Phoenix damages compensation

Read a summary of the Phoenix settlement or the full text and details of the agreement between Treasury Board of Canada and PSAC.

What does the compensation for Phoenix damages cover?

The Phoenix damages settlement provides three types of compensation.

The first type of compensation is general damages for stress, aggravation, and pain and suffering caused by the Phoenix pay system and the late implementation of the previous collective agreements. Any current or former employee who meets the eligibility below is entitled to this compensation.

The second type of compensation extends the Phoenix-related out-of-pocket expenses eligible for reimbursement for those who have specific expense claims to file. 

The third type of compensation addresses additional damages for those who faced severe impacts or hardship.

Your eligibility to claim one type of compensation does not impact your ability to access the other two.

Read the full text and details of the agreement between Treasury Board of Canada and PSAC.

How much is the compensation for Phoenix general damages?

Compensation for Phoenix general damages and late implementation of the collective agreement for the four-year period of 2016-2020 is $2500, based on a lump sum per fiscal year as follows:

Fiscal year

General Damages

Late Implementation Damages

 

April 1, 2016 – March 31, 2017

 

$600

 

$400

 

April 1, 2017 – March 31, 2018

 

$300

 

$200

 

April 1, 2018 – March 31, 2019

 

$300

 

$200

 

April 1, 2019 – March 31, 2020

 

$300

 

$200

Which period does this compensation cover?

The settlement covers damages for the following four fiscal years: 2016-17, 2017-18, 2018-19 and 2019-20. The fiscal year is from April 1 to March 31.

Is the Phoenix damages settlement a part of the collective agreements ratified in 2020?

No. The Phoenix damages settlement is separate from the new collective agreements being ratified in 2020. They were however negotiated in tandem to ensure the full power of the collective bargaining could be used to secure the best deal possible.

Who is eligible for Phoenix damages compensation?

To be eligible for compensation, you must meet all three criteria: 

1. An employee “on strength” for at least one day in the applicable fiscal year. 

2. An indeterminate employee or an employee on a term of more than 3 months during the applicable fiscal year.

3. An employee in the core public administration or other federal agencies. (see next question below).

The term “on strength” means you are an employee and actively working, or on leave, on assignment, on long-term disability or otherwise not active, but remain employed.

Am I an employee of the core public administration?

The core public administration includes members of the following bargaining units:

- Education and Library Science (EB) 

- Border Services (FB) 

- Program and Administrative Services (PA) 

- Operational Services (SV) 

- Technical Services (TC)

Treasury Board has also committed to funding the same Phoenix compensation for federal separate agencies. PSAC has negotiated Phoenix compensation for our members working for these agencies:

- Canadian Food Inspection Agency  

- Canada Revenue Agency 

- Office of the Auditor General of Canada  

- Parks Canada Agency 

- Social Sciences and Humanities Research Council

- Communications Security Establishment 

- Statistical Survey Operations

- Canadian Security Intelligence Service 

- Office of the Superintendent of Financial Institutions

Treasury Board has not committed to funding compensation for employees of parliamentary precinct units and Crown Corporations that use Phoenix. PSAC is pressing these employers to separately negotiate settlements for our members:

- Canadian Centre for Occupational Health and Safety 

- Library of Parliament 

- House of Commons 

- National Battlefields Commission 

- Parliamentary Protective Service  

- Senate 

I’m a retired PSAC member. Am I eligible for Phoenix compensation?

Yes. Retired employees who meet the eligibility criteria above will receive financial compensation for each fiscal year for which they are eligible. 

To receive compensation, retired employees will have to file a claim through Treasury Board. The details and the claim form have not yet been made available by the federal government.  

Details and a link to the claim form will be posted here when they become available.  

Please keep your contact information up to date via the member portal to continue receiving information about the Phoenix settlement. 

The federal government’s Phoenix damages webpage will also be updated when the claims process is launched. 

Retired employees who are not eligible for compensation for any/all fiscal years may, however, be part of an ongoing Phoenix class action in the Quebec Superior Court. Please visit the Sarailis Avocats website for more information. 

I’m a former PSAC member and no longer work for the public service. Am I eligible?

Yes. Former employees who meet the eligibility criteria above will receive financial compensation for each fiscal year in which they are eligible.   

To receive compensation, former employees will have to file a claim through Treasury Board. The details and the claim form have not yet been made available by the federal government.  

Details and a link to the claim form will be posted here when they become available.  

Please keep your contact information up to date via the member portal to continue receiving information about the Phoenix settlement. 

The federal government’s Phoenix damages webpage will also be updated when the claims process is launched. 

I was a term employee. Am I eligible?

Current term employees who meet the eligibility criteria above will be paid compensation directly.  

If you were a term employee, but are no longer employed, you will have to file a claim as a former employee. Details and a link to the claim form will be posted when they become available. 

Consult the federal government's webpage for more information on how your Phoenix damages payment may be calculated if you were a term employee during any of the fiscal years of the Phoenix agreement. 

Are students and casual employees eligible for Phoenix compensation?

Current and former students and casual employees aren’t eligible for Phoenix compensation because they do not belong to any of the unions covered by the Phoenix settlement. The unions, including PSAC, cannot negotiate for compensation on behalf of employees outside of their bargaining units.

Students and casual employees are, however, part of an ongoing Phoenix class action in the Quebec Superior Court. Please visit the Sarailis Avocats website for more information. 

Consult the federal government’s webpage for more information on how your Phoenix damages payment may be calculated if you were a casual employee during any of the fiscal years of the Phoenix agreement. 

What if I was a member of PIPSC or another bargaining agent before becoming a PSAC member and already received five days of leave as compensation under their agreement?

Employees who are eligible for Phoenix damages compensation negotiated by PSAC and another union cannot receive the full compensation from both agreements, nor can employees exchange the compensation they received from one agreement for another. In other words, an employee who has already received paid leave cannot return the leave for compensation from the PSAC settlement.

However, employees who were in a PSAC bargaining unit and a different union’s bargaining unit in any applicable fiscal year may be entitled to the difference in the value of PSAC’s compensation and the value of the leave they already received.   

If you’ve already received paid leave from another union’s Phoenix settlement for any given year and you were also part of a PSAC bargaining unit during that same fiscal year, you are entitled to any difference in the cash equivalent of the leave received and $300 (value of leave in the PSAC agreement). If the difference between the cash equivalent of the leave and $300 is $10 or less, you will not receive the difference. 

In addition, employees will receive the late implementation compensation for each fiscal year they were part of a PSAC bargaining unit. 

Example:

An indeterminate public service employee started their career in the public service during fiscal year of 2016/2017. At the time, the employee was in another bargaining agent’s bargaining unit and received 5 days of leave according to a Phoenix damages settlement.  The employee became a member of a PSAC bargaining unit in the middle of fiscal year 2019/2020 and remains there today.  The cash equivalent of this employee’s one day’s leave is $250.  

The employee would be entitled to $50 from the PSAC Phoenix damages settlement, for the fiscal year 2019/2020. The employee would also receive a $200 in damages for late implementation.  

Consult the federal government’s webpage for more information on how your Phoenix damages payment may be calculated if you were under multiple bargaining agents or an excluded employee during any of the fiscal years of the Phoenix agreement. 

Does this agreement mean I won’t be eligible for other compensation?

No. The Phoenix damages agreement provides for three types of compensation, and creates a faster, dedicated process for resolving individual claims.

In addition to what has already been negotiated, this agreement does not close off the possibility of negotiating further compensation at the bargaining table or further negotiations outside of collective bargaining should they be warranted.

I didn’t experience a specific Phoenix problem with my pay, does this agreement apply to me?

Yes. If you are an employee who meets the eligibility criteria, you are entitled to general damages compensation for stress, aggravation, and pain and suffering caused by the implementation of the Phoenix pay system.

If you incurred out-of-pocket expenses, or experienced severe personal or financial hardship due to Phoenix pay issues, you will be able to claim additional compensation by submitting a claim. See applicable sections below.

Is the compensation prorated if I didn’t work the full year?

No. You will receive the full lump-sum payment for each of the four fiscal years in which you are eligible.

Will a grievance be required to receive compensation under this agreement?

No. You do not need to file a grievance to receive compensation. Up to $2500 of general damages compensation will be automatically provided to current employees. Former employees and estates of deceased employees will receive a lump sum by submitting a claim. More information about the claims process will be posted when it becomes available.

Employees who have incurred out-of-pocket expenses due to the Phoenix pay system can seek reimbursement by submitting a claim. More information about the claims process is posted below.

Employees who suffered severe personal or financial impacts due to Phoenix pay issues, including missed opportunities to earn interest on savings accounts or other financial and capital investments, delays in receiving severance or pension payments, sick leave usage, mental anguish or trauma, will also be able to claim additional compensation by submitting a claim. More information about the claims process will be posted when it becomes available. See applicable sections below.

When will we receive our Phoenix damages compensation?

Current employees will receive compensation for Phoenix damages on their March 3, 2021 pay.  

Phoenix damages compensation will be paid in the form of a lump sum payment as part of your pay.  

A summary of your Phoenix damages payment will be available in MyGCpay (only available on the Government of Canada network). 

Current employees who have received leave credits from another union’s Phoenix settlement may receive different payment amounts on their March 3, 2021 pay and may receive additional payments at a later date. 

Members with questions or concerns about the amount they received for Phoenix damages are recommended to first contact their HR specialist for assistance. The HR specialist will have information on the payment breakdown. If members still have concerns, they can reach out to the Client Contact Centre for more information. 

What should I do if my general damages payment was incorrect? 

Members with questions or concerns about the amount they received for Phoenix damages are recommended to first contact their HR specialist for assistance. The HR specialist will have information on the payment breakdown. If members still have concerns, they can reach out to the Client Contact Centre for more information. 

Will my general damages compensation be tax-free?

We believe that this compensation for pain and suffering should be tax free. We are in the process of working with CRA to review the taxability of Phoenix damages. However, the federal government has confirmed that it intends to ignore these efforts and issue the up to $2,500 for our members, on March 3 – with taxes deducted. Treasury board provided no explanation for their actions. 

PSAC will pursue every legal route to secure the full compensation that our members are entitled to. This includes tax challenges that would retroactively see our members reimbursed should the payments be issued as planned on March 3, but our goal remains to avoid any time-consuming and complex tax disputes for our members. 

What is PSAC doing to reverse the government’s decision to tax Phoenix’s general damages? 

With the government refusing to cooperate, we have decided to submit our own declaration of facts to CRA directly, along with case law addressing the awarding of damages and those damages not being subject to taxation. CRA traditionally only engages with employers to provide opinions of taxability, but it is possible that they may choose to consider the new facts that we provide them. 

We will report back to the membership as soon as we have an update to share on this front. 

Check out what PSAC has been doing to get our members the full compensation they deserve.  

Why wasn’t taxability negotiated in the settlement itself?

The short answer is: we can’t do that. 

The union and employer, the parties to the agreement, cannot dictate to CRA how it interprets tax laws. The taxability of damages is determined by what the money is intended to compensate for. The parties added specific language in the agreement to specify that the general damages were for "stress, aggravation, pain and suffering" in recognition of the impact on members lives. There is a strong precedent of damages for those purposes being deemed non-taxable. 

Do clauses 11 & 18 in the Phoenix Settlement Agreement contradict themselves? 

Some members have asked why clause 18 in the Phoenix Settlement Agreement states: “Any monies paid pursuant to clause 11 are subject to applicable statutory deductions, if any, and are non-pensionable" and if that means that the Phoenix general damages are in fact taxable.  

The answer is: no. This is standard language that is inserted into all financial agreements because neither the employer or PSAC know whether CRA will determine if compensation will be deemed taxable, which is why it reads “...if any”. Once the employer and PSAC enter into an agreement, both parties must wait on CRA’s decision to determine which monies are taxable or not. Neither the employer, or PSAC, have the power to dictate to CRA what compensation can be taxed.   

However, PSAC does believe that Phoenix general damages shouldn’t be taxed and this is why we did ensure that it was mentioned in several places throughout the settlement agreement that the damages were for "stress, aggravation, pain and suffering" in recognition of the impact on members lives. There is a strong historical precedent of CRA determining that damages for those purposes are non-taxable.   

The CRA’s initial opinion did not turn on the language in clause 18. CRA mistakenly relied on facts that applied to the other bargaining agents (e.g., withdrawal of grievances in exchange for days of leave), and we are asking CRA to reconsider their opinion based on a corrected summary of facts. 

What if CRA maintains its opinion in light of the government’s actions? 

In the coming weeks, if CRA refuses to issue a new or different opinion due to the government’s inaction, members will have to force an official ruling from CRA by making individual appeals. 

PSAC is doing everything we can to avoid this outcome as it puts the burden on our members to file the appeals, but if it becomes our last option, we will develop streamlined systems to support members in making the claims quickly and easily. 

It is our top priority that PSAC members receive the full compensation that we negotiated, and which they deserve. We will continue to update members as we work to bring this to a conclusion. 

Will my Phoenix compensation be clawed back to repay outstanding overpayments? 

Treasury Board has indicated that the Phoenix damages compensation will not be applied to recover any outstanding overpayment an employee may have since Phoenix general damages are meant to compensate for the stress, aggravation, pain and suffering caused by the Phoenix pay system. 

If we are still owed money because of Phoenix pay issues, does the Phoenix settlement nullify our right to pursue the money we are owed?

No, members who have already submitted claims for out-of-pocket expenses and financial losses due to Phoenix should continue with the claims process. The government will continue to process these claims as they are received, and it will not impact your eligibility for general damages.

More information regarding out-of-pocket expenses is available from the employer.

What if I incur expenses or financial losses now due to Phoenix?

You are eligible to make a claim if you have incurred out-of-pocket expenses because of Phoenix pay problems. Examples of out-of-pocket expenses include banking fees for non-sufficient funds (NSF), financial penalty charges, interest charges on lines of credit and credit cards etc.   

There is a list of eligible expenses that can be claimed for reimbursement. 

Members may also seek reimbursement for tax advice, request an advance for government benefits or submit a claim for impacts to income taxes and government benefits.  

To file a claim for out-of-expenses, complete this online form.   

To file a claim for reimbursement for tax advice, complete this online form

To file a claim for an advance for government benefits, complete this online form. 

To file a claim for impacts to income taxes and government benefits, complete this online form. 

Note that claims are made directly to the employer and not through PSAC. 

Make sure to keep a copy of the claim form for your records, as well as all your receipts and/or appropriate documentation. 

Departments and agencies have assigned claims officers to help you with this process. 

If the employer denies your claim, in whole or in part, you have the right to file a grievance. Please contact the PSAC representative in your workplace, or your Component. 

See also: Claims for expenses and financial losses due Phoenix: claim out-of-pocket expenses 

 

What if I incurred severe personal and financial impacts due to Phoenix?

PSAC members who have suffered severe losses due to the Phoenix pay system, such as major financial losses (cars, homes, investments etc.), and longer-term impacts like ruined credit ratings, or significant personal hardship will be entitled to claim additional damages.  

A member who has incurred a loss that exceeds $1,500 in value can make a claim for major financial hardship or mental anguish caused by the Phoenix pay system that includes, but is not limited to:  

  • accumulated interest on outstanding amounts for loans, mortgages, credit card or other debts due to delayed severance or pension payments; 
  • issuance of interest on delayed severance, pension or missing pay; 
  • use of sick leave or other paid or unpaid leave for illness (the $1,500 threshold does not apply in this case);  
  • loss of security clearance, bankruptcy or significant credit rating impact, whether solely or in part caused by the Phoenix pay system;   
  • forced resignation from the public service because of financial hardship;  
  • compensation for individuals on maternity, parental or disability leave who experienced pay issues (the $1,500 threshold does not apply in this case);  
  • mental anguish and trauma that interfered with their ability to lead a normal life, whether solely or in part by the Phoenix pay system;  
  • financial losses from cashing-in public investments or RRSPs due to unpaid earnings;  
  • claims alleging a discriminatory practice as defined under the Canadian Human Rights Act;  
  • claims for damages for situations which disclose comparable personal hardship or impact caused in whole or in part by the Phoenix pay system. 

Details and a link to the claims process will be posted when it becomes available. 

Make sure to keep a copy of the claim form for your records, as well as all of your receipts and/or appropriate documentation. 

The employer has up to 2 years from the time they receive the necessary information to make a decision.  If the employer denies your claim, in whole or in part, you have the right to file a grievance. Details on the process for filing a grievance will be posted when it becomes available.  

The employer is in the process of setting up a new claims office to process claims for damages for severe impacts and other demonstrable cases following the signing of this agreement. Once the claims process is set up, claims will be made directly to the employer and not through PSAC. 

What happens to the grievance I filed related to Phoenix?

PSAC’s Phoenix settlement provides general damages compensation for stress, aggravation, and pain and suffering caused by the implementation of the Phoenix pay system.

Grievances filed prior to this agreement related to general damages or late implementation of collective agreements will be reviewed, and if resolved, will be withdrawn.

Members with outstanding grievances will be contacted regarding how their grievances will be addressed in light of the settlement.

Members will be contacted prior to the withdrawal of any grievance. Grievances will also only be withdrawn if the underlying pay issues stemming from the grievance have been resolved.

If you have an outstanding grievance and unresolved pay issues, please see the section below on ways PSAC can assist with resolving your pay issues.

What can I do if my pay issues have not been resolved?

PSAC’s mission is to defend and support federal public service workers. Nobody knows better than we do how hard you work for Canadians. That’s why PSAC has worked hard to secure support for those impacted by Phoenix. Know your rights—and access the support you deserve.

If you have been impacted by Phoenix, we created a quick resource for various common problems.

If you need personal assistance with resolving a complex pay issue, you can reach out to one of our Pay Issue Specialists by submitting a general inquiries form. Select Phoenix pay issue from the What is your inquiry about? drop down menu. A member of our team will contact you.

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March 3, 2021