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This bulletin is to provide departments with direction on how to proceed to make the employees whole following the two
decisions issued by the Public Service Staff Relations Board (PSSRB) - file # 169-2-660 to 665 on December 11, 2003 and file #
169-2-669 to 674 on April 26, 2004, in relation to the complaints made by the Professional Institute of the Public Service of
Canada (PIPSC) regarding the check-off provisions in the six PIPSC collective agreements.
Background
The PSSRB decision of December 11, 2003 resolved the issue of which date to use to establish the change in union dues for
subsequent appointments.
The decision also provided for the payment of dues owing to PIPSC to make the bargaining agent whole for the period from May
2001 to February 2004.
The Treasury Board Secretariat (TBS) paid the amount owed to the Institute from this PSSRB decision since this decision
required a change in TBS policy.
The PSSRB decision of April 26, 2004 requires the payment of the dues owing to PIPSC for the period between May 2001 and July
2004 resulting from administrative issues within departments and agencies. TBS will issue this payment to PIPSC by August 24, 2004
on behalf of the respective departments and agencies (see our bulletin dated July 7, 2004).
Making the Employee Whole
The action taken to date to rectify these two PSSRB decisions does not satisfy the issue of over-deduction or under-deduction
of union dues taken from employees' regular salary cheques.
Employees must not be over-deducted dues nor must employees be under-deducted dues. Employees are to be made whole by either
refunding any over- deduction of dues or by recovering any under-deduction of union dues.
Please note that the Excel worksheet provided to the 52 affected corporate compensation offices on July 8, 2004 which listed
all the employees for whom the TBS paid dues to PIPSC, must be reviewed to ensure that the amount of dues actually paid by the
employees is not less than or greater than $47.00 per month.
The review period for this exercise is from May 2001 to the February 2004.
Situations covered by the PSSRB decision of December 11, 2003
Where TBS paid the PIPSC dues on behalf of the employee for the period between the actual appointment and the issuance of the
authorizing document, the following action is required:
The compensation advisors must determine the amount of dues the employee actually paid in that period. If the amount paid by
the employee is greater than the rate of $47.00 per month, then the department is to reimburse the difference between the amount
paid and the rate of $47.00 per month directly to the employee, from departmental funds.
The PWGSC pay system cannot be used to issue a refund of the over- deducted union dues. Departments must issue the refund
through the departmental finance section until the PWGSC pay system has been modified.
Note that there is a possibility that former bargaining agents may not authorize a refund of dues paid to them for the period
between the month of appointment and the month of the letter of offer prior to February 2004.
Example 1:
An employee was deployed to a position represented by PIPSC on April 1, 2003. The letter of offer was issued on May 20,
2003. The employee was paying union dues at the rate of $50.00 per month to the former bargaining agent. Union dues for the
former bargaining agent were ceased on June 1, 2003, and dues for PIPSC commenced at $47.00 per month on June 1, 2003.
As a result of the PSSRB decision of December 11, 2003, PIPSC dues should have commenced on May 1, 2003 (first of the month
following the effective date of deployment).
No refund of dues can be obtained from the former bargaining agent for May 2003.
The employee was over deducted $3.00 in union dues for May 2003. The department refunds $3.00 directly to the employee from
departmental funds (through the departmental finance section). This makes the employee whole.
For the above situation where the employee had paid a lower amount to the former bargaining agent (e.g. $35.00 per month), then
the employee owes the difference between the amount paid via salary deduction, and $47.00 per month, to the department. Using the
above example, the employee would owe $12.00 ($47 less $35) for May 2003. The employee is to be advised of the requirement to
recover the $12.00 from the employee's salary as a debt to the crown (code 540).
The normal recovery method for union dues deductions via the PWGSC pay system cannot be used as this would result in the
Institute receiving monies twice for the same period.
Example 2:
An employee was on an acting assignment in a position represented by PIPSC effective November 24, 2003 to August 31, 2004. The
letter of offer was dated April 16, 2004.
The employee was paying union dues to the former bargaining agent in the amount of $85.00 per month. Union dues for the former
bargaining agent were ceased on May 1, 2004 and the dues for PIPSC commenced on May 1, 2004.
As a result of the change in TBS policy on February 9, 2004, the change in dues should have been made effective December 1,
2003.
The department requested approval for a refund of dues paid in error to the former bargaining agent.
The former bargaining agent authorized a refund of dues for March and April 2004 only. Consequently, the department issued the
refund for March and April to the employee.
The department recovered the arrears for PIPSC for March and April 2004 from the employee's salary. In addition, the department
issued a cheque to the Institute for the dues owing from December 1, 2003 to February 29, 2004.
In order to make the employee whole, the department must refund, from departmental funds, the difference
between the $85.00 per month deducted from the employee from December 2003 to February 2004 (for the former bargaining agent) and
the $47.00 per month that the employee should have paid to the new bargaining agent. The refund would be $85.00 less $47.00 times
three (3) months. The refund is issued through the departmental finance section.
Situations covered by the PSSRB decision of April 26, 2004
In situations where the employee paid union dues to the wrong bargaining agent for a period of time and the
former bargaining agent did not authorize a refund of all or part of the dues paid in error to that bargaining agent, the employee
must be made whole for this period as well.
Example:
An employee is promoted to a position represented by PIPSC on October 15, 2001. The letter of offer is issued on September 30,
2001. Union dues should have changed on November 1, 2001. However, due to an error, dues continue to be deducted for the former
bargaining agent until December 2002. PIPSC dues are commenced on January 1, 2003, and dues for the former bargaining agent are
ceased effective January 1, 2003.
The former bargaining agent authorizes a refund of twelve months (January 2002 to December 2002), and the department issues the
refund to the employee. Twelve months of PIPSC arrears were recovered from the employee's salary over the period from February
2003 to January 2004.
The PIPSC dues owing from November 1, 2001 (first of the month following the date of the promotion) to December 31, 2001 will
be indicated in the departmental report to TBS for August 6, 2004, and TBS will pay the dues owing to PIPSC for the two months on
behalf of the department.
The employee must be made whole for the period from November 1, 2001 to December 31, 2001. If the employee had paid $80.00 per
month for each of these months to the former bargaining agent, then the employee must be reimbursed the difference between $80.00
per month and $47.00 per month for the two months. The department refunds this amount ($80 - $47 times two = $66) directly to the
employee from a departmental account via the departmental finance section.
However, if the employee had paid only $30.00 per month for November 2001 and December 2001 to the former bargaining agent,
then the department must advise the employee of the amount owing (e.g. $47 -$30 times two = $ 34) and then recover the difference
from the employee as a debt to the Crown (code 540).
Notes:
- The normal recovery method via the PWGSC pay system cannot be used as this would result in the Institute receiving monies
twice for the same period.
- In situations where the employee received the refund of dues for the full period that dues were paid in error to the former
bargaining agent (either from the bargaining agent or from the department), then no action is necessary to make the employee
whole, as the employee was made whole by the refund.
- In situations where the department paid the dues owing, directly to PIPSC, for the period not refunded by the former
bargaining agent, the employee must still be made whole by either refunding the difference over deducted from the employee or
recovering the under deduction from the employee as a debt to the Crown (code 540).
- There may be situations where it is determined now that the commencement of union dues was missed completely for a number of
months, between May 1, 2001 and July 31, 2004, for a new appointment (dues never paid in error to another bargaining agent).
In these cases, the department paid the arrears owed directly to PIPSC (or the TBS will pay the arrears on August 24, 2004).
In these situations, the employee must be made whole. The department must recover, from the employee, the amount of the
arrears paid on the employee's behalf as a debt to the Crown (code 540).
Example:
An employee hired as a term of less than three months in a position represented by PIPSC is extended for six months and becomes
subject to the collective agreement effective February 25, 2004. Dues should have commenced on March 1, 2004. It is determined in
June 2004 that dues were never commenced.
The action to be taken is:
- Commence current PIPSC dues for August 2004;
- Add the employee to the Excel worksheet for the report required by TBS for August 6, 2004;
- Indicate the amount of the arrears owing from March 2004 to July 2004 (TBS will pay this amount to PIPSC on August 24,
2004);
- Make the employee whole by recovering the amount indicated on the TBS report from the employee as a debt to the Crown, and
- Request PWGSC to amend the T4/Relevé 1 to credit the above amount of union dues deductions.
Income Tax Implications
There is no change to the existing taxation reporting requirements. In situations where the employee receives a refund, the
T4/Relevé 1 for the affected employee must be amended to reflect the reduction of union dues in the amount of the refund related
to the specific taxation year. In situations where the employee owes arrears of union dues, the arrears are to be reported on the
T4/Relevé 1 in the year in which the amounts are deducted from the employee's pay.
Where a refund is issued to the employee to make the employee whole, the compensation advisor sends a letter to the PWGSC pay
office requesting that the T4/Relevé 1 be manually adjusted for the year(s) affected by the refund.
Where a recovery of union dues is made from the employee's salary using code 540 to make the employee whole, once the recovery
is completed, the compensation advisor sends a letter to the PWGSC pay office requesting that the T4/Relevé 1 be manually
adjusted for the year in which the monies are recovered.
In addition to the amended T4/Relevé 1, to ensure the Canada Revenue Agency (CRA) fairness provision is requested, the
employee must be provided with the standard letter when an amended T4 / Relevé 1 is issued because of a refund of union dues. In
addition, the employee must be provided with the sample letter as outlined in our bulletin dated September 15, 2003.
Departmental compensation and staff relations managers should direct any questions that they may have to their appropriate
corporate officials who, if need be, can contact the Pay Administration Section.
Thomas A. Smith
Director, Pay Administration
Management Policy and Labour Relations
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