No. 39 October 29, 1999
I t took almost 16 years of struggle but our persistence has paid off and our federal pay equity complaint has been resolved. After years of joint studies, tribunal hearings, court hearings, grievances, demonstrations, sit-ins and protests of all kinds, it's finally over.
On October 19, Justice Evans of the Federal Court turned down all of the government's arguments and denied their appeal of the 1998 Canadian Human Rights Tribunal decision. The Globe and Mail described the decision in a telling headline: "Ottawa suffers total defeat…"
As a result of Evans' decision and almost a week of intensive meetings, the PSAC and the federal government have agreed on the implementation of the Tribunal decision, and have reached an agreement on all the outstanding Phase III items which would have required more Tribunal hearings. The agreement will be presented by the parties to the Canadian Human Rights Commission and then to the Tribunal for final resolution. The only thing left to do is for the government to prepare and issue the cheques and for our current and former members to receive them.
Treasury Board is aiming to issue the cheques for retroactive pay and payments for salary-related benefits to current employees (including those who have moved to other groups) sometime in the next four to six months from now. Payments for current employees will be divided into two initial payments. The first payment will cover the period from 1989 to the present, followed by a payment for the 1985 to 1989 period. The reasons for this is that the first payment can be calculated automatically through the pay system while the second payment will have to be calculated manually.
The calculations of the interest owed can only begin once these first cheques have been issued. A separate cheque will be issued based on the full amounts previously paid. Treasury Board has indicated that all three cheques for current employees will be made in the calendar year 2000.
Calculations for the first cheques for retired employees and other former employees will follow and will take several months at least to issue.
Former employees who are not receiving superannuation cheques should contact their last employing department in order to claim what is owed.
The calculation of the amounts owing is in accordance with the methodology ordered by the Tribunal. Actual amounts will vary by individual depending on length of service, etc. Note: Total amounts by group and level will be available from the Alliance in the next two weeks.
The parties have agreed that these will be the Canada Savings Bond rates used to calculate the interest owed. It was necessary to work this out because there are multiple rates in some years. In accordance with the Tribunal decision, the interest will be calculated in six month periods, as of March 31 and September 30 of each year and will be calculated up to the date of the payment of the pay equity money owed. The interest will be applied to 90% of the total pay equity adjustment. No interest is paid on amounts deducted for superannuation, CCP, QPP and EI premiums which works out to about 10% on average.
Rates of interest: 1985 - 11.25%; 1986 - 10.0%; 1987 - 7.75%; 1988 - 9.0%; 1989 - 10.5%; 1990 - 10.5%; 1991 - 10.75%; 1992 - 7.5%; 1993 - 6.0%; 1994 - 4.25%; 1995 - 7.50%; 1996 - 5.25%; 1997 - 5.25%; 1998 - 3.5%; 1999 - 4.0%
The parties have worked out an agreement on the salary-related benefits. Recognizing that individual calculations for many of these benefits would unduly delay the preparation of the cheques, lump sum payments have been agreed upon in some cases, instead of individual calculations.
Former employees who received severance or separation benefits during the retroactive period will receive lump sum payments based on the following number of weeks. These numbers are based on averages.
Retirement: 20 weeks
Death 15: weeks
CRP 82: weeks
EDI 68: weeks
ERI 50: weeks
Work Force Adjustment Directive: 45 weeks
Work Force Adjustment Program: 45 weeks
ASD Type 1 (with severance pay), and NAVCAN: 15 weeks
ASD Type II: 28 weeks
ASD Type III: 41 weeks
The amount owing will be calculated as follows, using retirement as an example: 20 weeks x the difference in salary between the employee's pay equity adjusted salary and the salary paid out at the time of retirement.
A 5% lump sum payment will be made to cover the period from March 8, 1985 to May 31, 1994. From June 1, 1994 to July 29, 1998, these items will be re-calculated on an individual basis.
Indirect benefits, which include all the various allowances ranging from everything from diving to dog handling, will be compensated for by a rate of 5 cents an hour for the HS group and 13 cents an hour for CR, ST, EU, DA-CON and LS groups. The reason for the difference is that the HS group is already receiving some compensation in this regard in the form of the supervisory differential.
All employees on paid maternity leave will be considered as having been at work for the purposes of the pay equity adjustment. This means that for any periods of maternity leave, employees will receive 100% of the adjustment owed, not 93%.
Before 1993, long term disability payments were not increased if an employee's salary was increased during the period of disability. In this case, the pay equity adjustments will be counted in and the payments adjusted upward accordingly. No monies will be recovered from any individual in this situation as a result of the lump sum payment.
The Alliance and the Treasury Board, in consultation with Revenue Canada will develop and issue bulletins and other materials providing general information on the tax and other financial implications related to the lump sum pay equity payments. This information should be available in early January. Members are also encouraged to use the services provided by their own financial institutions.
Members who have not already done so should contact their department to obtain the special form which is available to employees who wish to reduce the amount of tax to be deducted from their pay equity payments in order to make RRSP contributions.
Because the agreement between the parties was signed before the Agency comes into existence on November 1, the rates of pay of all federal employees affected by the pay equity complaint who are being transferred will include the final pay equity adjustment.
We know that members will have questions about what they're owed. The union is not in a position to calculate what is owed to each individual current or former member. We just don't have the necessary information; only the government has access to your employment records.
The union will continue to issue bulletins in order to answer general questions about the agreement. This information will be available from the PSAC's regional and component offices and on our web site: www.psac-afpc.com