June 10, 2003
Implementation of Retroactive
Rates of Pay
The purpose of this bulletin is to provide departments with
direction to apply a change in the method of implementing retroactive rates of
pay for all employees.
Background
In 1999, as a result of the 1992 Public Service Staff Relations
Board (PSSRB) Lajoie Decision (File # 166-2-20731/32) and the subsequent Federal
Court of Appeal decision (# A-894-91), departments were instructed to apply the
Lajoie decision. The decision essentially stated that when new rates of pay come
into effect retroactively, there should be no recalculation of pay but rather a
straight down move into the new pay scales. This method of applying retroactive
rates of pay has remained in effect for represented employees since that time.
New Application
As a result of recent PSSRB decisions concerning the
implementation of retroactive rates of pay, the Treasury Board Secretariat and
some of the bargaining agents have signed Letters of Understanding (LOU)
relating to the implementation of retroactive rates of pay.
Effective June 2, 2003, the new provisions are applicable to all
employees in organizations listed in Schedule I, Part I of the Public
Service Staff Relations Act, represented by a bargaining agent who has
signed the LOU, when implementing retroactive upward revisions in pay rates. In
other words, when these employees become subject to new collective agreements,
they will be entitled to the better of:
- a recalculation of the rate of pay as was applied prior to 1992, or
- the straight down revision of the rates of pay (the method used for
Lajoie).
This new method of calculating is not retroactive and applies
only to collective agreements signed after the signature of the Letter of
Understanding, (i.e. after June 2, 2003).
For the implementation of the retroactive rates of pay for these
new collective agreements it will be necessary to review all appointments and
salary-related benefits (e.g. overtime, extra-duty, leave and termination
payments, pension) made during the retroactive period of each agreement and give
the employee the better treatment of straight down or recalculation. Please note
that it may also be necessary to adjust any subsequent appointments and salary
changes.
These new provisions shall also apply for excluded and
unrepresented employees, including executives, effective June 2, 2003, to
coincide with the coming into force of this change in application for
represented employees.
Attached you will find a series of questions and answers that
will help your advisors with the implementation of retroactive rates of pay.
All grievances regarding the application of retroactive rates of
pay, which have already been submitted and are, either at adjudication or are
being held at a level in the departmental grievance process, should be reviewed
individually on their merits with a Staff Relations representative and the
grievor and/or their representative with a view to resolving them without
further recourse to a third party. Respective departments and bargaining agents
are currently being contacted in this regard.
Departmental Compensation and Staff Relations managers should
direct any questions that they may have to their corporate Compensation or Staff
Relations officials who, if need be, can contact the Pay Administration Section.
Original
signed by
Brent DiBartolo
Assistant Secretary
Labour Relations and Compensation Operations
Human Resources Management Office
Application of Retroactive Rates of Pay
Q1. Do the Letters of Understanding (LOUs) change the method
of implementing retroactive rates of pay for current or previous collective
agreements?
No. Departmental personnel should not review the
implementation of retroactive rates of pay and salary-related benefits for
current or previous collective agreements. The revised provisions apply to
collective agreements signed after the signature of the LOU i.e. after June 2nd,
2003.
Q2 To whom do the LOUs apply?
Each LOU applies to:
- employees in a group represented by the bargaining agent who signed the
LOU, and
- employees appointed in the retroactive period to a group represented by
that bargaining agent.
Q3. What rules apply to employees represented by a
bargaining agent who has not yet or does not sign one of these Letters of
Understanding?
The provisions will apply only once the bargaining agent
signs the LOU or once they are negotiated in the new collective agreement.
Q4. Does this new implementation method for retroactive
rates of pay apply to casual employees and employees hired for a specified
period of less than three (3) months?
Yes. Employees hired for a specified period of less than
three months and casuals hired under section 21.2 of the Public Service
Employment Act (PSEA) who are employed in one of the groups where a LOU was
signed are entitled to receive retroactive remuneration in accordance with
the new method of implementation of retroactive rates of pay.
Q5. Does this new application for retroactive rates of pay
apply to excluded and unrepresented employees as well, including Executives?
Yes, effective June 2nd, 2003, the policy change
will apply to excluded and unrepresented employees, including Executives.
Q6. Will employees be entitled to the new application of
retroactive rates of pay if they were:
- on acting assignment during the retroactive period into a group where a
LOU has been signed for that group, or
- acting in an excluded or unrepresented group during the retroactive
period.
Yes, the new method of implementation of retroactive
rates of pay applies to acting assignments.
Q7. Will employees who are salary protected be entitled to
the new method of implementation of retroactive rates of pay?
Yes. Please note that when determining whether or not
salary protection ceases or continues when new collective agreements are
signed, the two maximums must be compared as of the effective date of the
revisions (in the two positions). If
one of the collective agreements has expired and the new rates have not yet
been established as of that effective date (the new collective agreement has
not yet been signed) then the employee is not taken out of salary protection
until current valid rates can be compared against current valid rates. Once
the rates for both groups and levels are based on current valid rates of pay
(neither rate is based on rates from an expired collective agreement), then
the maximums are compared to determine whether salary protection ceases or
continues.
Q8. Is the Public Works and Government Services (PWGSC) pay
system able to automatically deal with this change in application of
retroactive rates of pay?
The PWGSC pay system will continue to process the revisions
using the straight down method. Departments will be required to review all
appointments and salary-related benefits (e.g. overtime, extra-duty, leave
and termination payments, pension) made during the retroactive period to
ensure the employees receive the better of the recalculation or straight
down method.
Q9. Will departmental personnel have additional time to
implement new collective agreements?
Employees must continue to receive all adjustments within
the legislated or negotiated implementation period (e.g. for most collective
agreements, 90 days from the date of signature of the collective agreement
or the date the arbitral award is rendered). Where the recalculation method
provides the better benefit to the employee, departmental personnel will be
required to raise the necessary input into the PWGSC pay system.
Q10. Will the Treasury Board be providing additional salary
dollars in order to implement this change in application?
No. The change in application does not affect the current
Treasury Board process of fund allocation as a result of implementing new
rates of pay. When new rates of pay are authorized, Treasury Board allocates
funds to departments based on a formula to cover the additional salary cost.
Q11. Will all the grievances regarding retroactive rates of
pay and Lajoie be settled now?
The LOUs will provide for the recalculation of all
appointments and salary-related benefits for employees made during the
retroactive period of each new collective agreement. All current grievances
regarding the method of implementation of retroactive rates of pay, which
have already been submitted and are either at adjudication or are being held
at some level in the departmental grievance process, should be reviewed
individually on their merits with Staff Relations and the respective grievor
or their bargaining agent representative with a view to resolving them
without further recourse to a third party. Respective departments and
bargaining agents are currently being contacted in this regard.
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