Guidance Series - Selecting Employees for Retention and Lay-Off

Table of Contents

1. Introduction
2. Legal basis
3. Considerations
4. Process of selecting employees for retention and lay-off
5. Recourse: Complaints to the Public Service Staffing Tribunal (PSST)
6. Conclusion
7. References
8. Questions and answers

1. Introduction

This document covers situations in which a deputy head must assess and select certain employees to be retained or laid off where some, but not all, of the employees in the affected part of the deputy head’s organization are to be laid off. It is intended primarily for the guidance of human resource advisors and managers who must administer such situations.

The document focuses on:

• the processes needed to identify the employees who must be assessed;
• conducting assessments; and
• identifying the employees who are to be retained and laid off.

When all positions of the affected part of an organization must be eliminated, then all the affected employees are laid off and this document does not apply.

For information about work force adjustment in general, including access to the Work Force Adjustment Directive (WFAD) and related collective agreement appendices, the Executive Employee Transition Policy (EETP), and other related topics, consult the Treasury Board Secretariat (TBS) Web site.

2. Legal basis

Section 64 of the Public Service Employment Act (PSEA), gives deputy heads the authority to lay off employees in certain specified circumstances, as long as the lay-offs and the identification of persons to be laid off are in accordance with the Regulations of the Public Service Commission (PSC):

PSEA s.64. (1) Where the services of an employee are no longer required by reason of lack of work, the discontinuance of a function or the transfer of work or a function outside those portions of the federal public administration named in Schedule I, IV or V to the Financial Administration Act, the deputy head may, in accordance with the regulations of the Commission, lay off the employee, in which case the deputy head shall so advise the employee.

PSEA s.64. (2) “Where the deputy head determines under sub-section (1)that some but not all of the employees in any part of the deputy head's organization will be laid off, the employees to be laid off shall be selected in accordance with the regulations of the Commission.”

Section 22 of the PSEA provides the PSC with its general regulatory authority, including the authority to establish regulations respecting the manner in which employees are to be laid off, and the means of selecting those employees:

22. (1) The Commission may make any regulations that it considers necessary to give effect to the provisions of this Act relating to matters under its jurisdiction.

22. (2) Without limiting the generality of subsection (1), the Commission may make regulations

(i) respecting the manner of laying off employees and the manner of selecting employees to be laid off, for the purposes of section 64.

The Public Service Employment Regulations, 2005 (PSER), in subsection 21(1), specify the manner of laying off employees where some, but not all, of the employees in the affected part of an organization must be laid off, as follows:

PSER s. 21. (1) If the services of one or more employees of a part of an organization are no longer required in accordance with section 64 of the Act, the deputy head shall assess the employees employed in similar positions or performing similar duties in the same occupational group and level within that part of the organization, and identify, in accordance with merit, [boldface added] the employees who are to be retained, having regard to the continuing functions of that part of the organization, and identify the remaining employees who may be declared surplus and laid off [boldface added].

The PSEA defines “merit” in section 30. The definition includes essential qualifications and current and future asset qualifications, operational requirements and organizational needs. Essential qualifications must always be met, while the choice and use of the other merit criteria are at the discretion of the manager are optional and may be applied depending on need. Section 30 of the PSEA refers to “appointments,” but the definition of merit also applies to the identification of employees to be retained, or declared surplus and laid off pursuant to subsection 21(1) of the PSER.

Employees not identified for retention are declared surplus by their deputy head prior to being laid off. It is important to note that the deputy head’s authority to declare employees surplus flows from the employer’s policies and work force adjustment agreements, and not from the PSEA or PSER. There is no provision in either the PSEA or the PSER to declare employees surplus, only to provide them with an entitlement to a priority appointment and to lay them off if they have not been reappointed before the end of their surplus period. Employees remain in surplus status for varying periods, as per policy and collective agreements, during which time they may be considered or marketed to other positions to avoid lay-off.

3. Considerations

• The values of fairness and transparency must be respected by organizations in conducting the process of selecting employees for retention and lay-off. These values are defined in the PSC Appointment Policy as follows:
• Fairness means that decisions are made objectively and free from political influence or personal favouritism. Policies and practices reflect the just treatment of employees and applicants.
• Transparency means that information about decisions, policies and practices is communicated in an open and timely manner.
• The objective of the process is to identify, on the basis of merit, those employees who are to be retained in order to carry on the continuing work of the affected part of the organization. The process, therefore, is based on the assessment of qualifications in terms of the needs of the remaining functions.
• The deputy head or his/her delegate(s) must respect the PSER, which describes the manner of selecting employees for retention and lay-off in situations where the services of one or more employees of a part of an organization are no longer required. The deputy head will determine the part of the organization affected, the similarity of positions, the merit criteria required for the continuing functions, the means of assessment, and then will make the final decision.
• The process of identifying employees for retention and lay-off, and its results, may be very stressful for both employees and managers and should be conducted with care and sensitivity.
• When employees are identified for surplus status and lay-off it does not mean that they have had less than fully satisfactory performance. In fact, the nature of this exercise, and the reduced number of persons who can be retained, may result in employees who are among the organization’s better performers being identified for lay-off . Lay-off does not imply that the persons laid off were employees who don’t meet the work expectations or are unsuitable for similar or different positions elsewhere. This is an important point for employees and their potential new employers to remember.
• Performance or disciplinary problems must be addressed outside the work force adjustment process. Managers should not use the process of selecting employees for retention and lay-off to address such issues. Keep in mind that a surplus declaration or lay-off automatically triggers a priority for appointment which imposes an obligation on all other organizations, as well as the “home” organization, to reintegrate the employee.
• The PSEA and the PSER provide considerable discretion to deputy heads regarding the choice of merit criteria, the means of assessment and the final selection. Therefore, it is important that considerable attention be paid to keeping employees informed and to explaining the choices made at appropriate stages in the process.
• The essential and asset qualifications, as well as the operational requirements and organizational needs are all based on the current and future needs of the affected part of the organization. These needs may include those of the broader organization as long as those needs can be linked to the affected area.
• The process of identifying employees for retention and lay-off is not to be used to make appointments to new positions. When an organization needs to make appointments in a work force adjustment situation involving the creation of new positions, or to fill positions outside of the affected part of the organization, then a regular internal appointment process (advertised or non-advertised) is conducted. Employees not selected for appointment would be declared surplus and informed of their right to recourse.

4. Process of selecting employees for retention and lay-off

The following six steps, as summarized, reflect the usual process leading to the selection of employees for retention or lay-off. Note that these steps are usually, but not necessarily, sequential in nature. For instance, steps 1 and 2 (“the part” of the organization and “similar positions”) are especially interrelated. In addition, it may be helpful to determine the merit criteria required in step 3 to help define similar positions in step 2.

• Step 1 - Determine the part of the organization that is affected.
• Step 2 - Identify similar affected positions and employees. Process of selecting employees for retention and lay-off Identify the positions that constitute similar affected positions and the employees who occupy these positions will be assessed and identified for potential lay-off.
• Step 3 - Determine the merit criteria and assessment methods. For each set of similar positions in that part of the organization, determine the qualifications which are essential for performing the continuing functions and any current and future: asset qualifications, operational requirements and organizational needs, if required.
• Step 4 - Communicate decisions to employees. Advise those employed in the affected part of the organization of any decisions, including the rationale and the plans for assessment and selection, including the relevant employment transition policies and services available to employees who will be identified for surplus status and lay-off.
• Step 5 - Assessment and selection. For each of the qualifications required for each set of similar positions in that part of the organization, determine the assessment plan/methods or rating guide which will be used and then assess the employees against those criteria; use the results of the assessment to identify those employees who are to be retained and those who are to be declared surplus and laid off.
• Step 6 - Communicate results to employees. Advise each employee of his or her assessment results, the right to recourse, the plans of the organization respecting reintegration during the surplus period, access to available transition services, and the timing of any actions.

Step 1 - Determine the part of the organization that is affected

Work force adjustment, involving lack of work, discontinuance of a function, or the transfer of a function or work outside the public service can result in lay-offs. In such cases, the deputy head or delegated manager needs to identify the part of the organization where the services of one or more employees are no longer required. The manager must determine the organizational and geographical boundaries (the area of adjustment) within which all employees occupying similar positions of the same occupational group and level are to be considered for either retention or lay-off.

Some questions to consider in determining the part of the organization that is affected:

• Is it merely a section?
• Is it something larger, such as a division or a directorate?
• Is it something very significant, such as an entire branch or a regional office?
• Is it a program or a type of work which is inter-organizational? Is the affected area local, regional, national?

In the final analysis, a decision regarding the organizational and geographical area of adjustment should take into consideration the current and future operational realities, cost considerations and the fair treatment of the affected employees.

Step 2 - Identify the similar affected positions and employees

Once the part of the organization where some positions will no longer be needed has been identified and defined, managers need to determine which of their organization’s affected jobs are of a similar occupational nature, with similar duties in the same occupational group and level.

Some questions to consider are:

• Are any of the positions unique and stand-alone?
• Are there any pools of reasonably "homogeneous" positions (those with the same or very similar duties and classified at the same group and level - e.g. the similar positions might be “all CR-04 finance clerks” or they might be “all jobs classified as CR-04 personnel clerks” including staffing and staff relations clerks)?
• Can a case be made for somewhat similar positions classified at the same group and level to be considered as "homogeneous" (e.g. personnel, finance, and administrative clerks classified as CR-04s)?
• Do the duties require similar qualifications?

When identifying the affected employees, it is important to note that some persons performing the duties of the affected positions are not subject to lay-off and therefore are not included in the assessment process, while others are.

Employees to be included are:

• The incumbents of the affected positions who are performing duties elsewhere, such as:
• employees on assignment/secondment in another area or organization; and
• employees in acting appointments in another area or organization;
• Employees on leave of absence, unless their positions have been filled indeterminately behind them (see TBS Policies and Guidelines); and
• All other incumbents in the affected positions.

The following persons should not be included in the assessment process:

• Specified period employees (PSER subsection 21(6)). Note that specified period employees are subject to lay-off but are dealt with separately according to the policies of the employer and collective agreements (Work Force Adjustment Directive and s.7 of TBS Term Employment Policy);
• Employees who volunteer and are accepted for lay-off (PSER subsection 21(4));
• Indeterminate employees who resign or retire before the expected lay-off date;
• Indeterminate persons who are performing the duties of affected positions but who are not the regular incumbents of those positions; these include
• employees on assignment or secondment; and
• employees acting in other positions.
• Organizations are advised to return “acting” employees and persons on assignment or secondment to their substantive positions before beginning a process to identify employees for retention and lay-off; this will avoid complications arising from the perception that these persons are “employed” in the affected positions; and
• As mentioned previously, employees who have presented performance, incapacity or discipline problems should have been dealt with prior to and outside the process for selecting employees for retention and lay-off, in accordance with the employer’s policies.

Step 3 - Determine the merit criteria and assessment methods

In general, the application of merit, as described in some detail in the PSC’s Guide to Implementing the Assessment Policy, applies also to the identification of employees for retention and lay-off.

• Everyone who is appointed (or retained in a selection for retention) must meet the essential qualifications, which include official language proficiency (unless excluded pursuant to the Public Service Official Languages Exclusion Approval Order (PSOLEAO).
• The manager may take into account:
• qualifications that are considered an asset for the work, currently or in the future;
• any current or future operational requirements; and
• any current or future needs of the organization.

The essential qualifications, asset qualifications, operational requirements and organizational needs form the basis for the assessment of merit and are collectively referred to as the “merit criteria.” The resulting document listing the identified merit criteria is known as the “Statement of Merit Criteria.”

Identifying merit criteria starts with a thorough understanding of the work to be performed - including the present and future context of the continuing work. This means not only looking at the work involved, but also examining the relationship between the work and the environment.

Because merit criteria consist of more than just qualifications, and in accordance with the PSER, managers can have regard to the continuing functions of that part of the organization when determining the merit criteria. This means that managers have discretion when establishing criteria and can look at what is needed in the present and for the future. This could include, for example, establishing criteria based on the general direction of the organization as a whole, if there is a link to the affected part of the organization. For example, it could be that the organization is moving towards further automation of systems and procedures; however, the manager is only responsible for the work force adjustment in his or her administrative unit. The manager would be able to establish merit criteria based on the requirements of the position at that time, and include criteria which will take into account that her part of the organization will be using automated systems in the future.

Elements of the organization’s integrated human resources and business planning – such as the environmental scan and analysis of the work force (both of which should address employment equity and official languages issues), as well as the identification of skills gaps – also play an important role in helping managers develop merit criteria since all of these factors provide the context for this work.

All identified qualifications must meet the qualifications standards established by the employer in its Qualification Standards. However, managers may, if they wish, establish qualifications that exceed those minimum standards.

Establishing essential qualifications

Essential qualifications are qualifications required to perform the work involved and may include, but are not limited to:

• Experience;
• Education;
• Knowledge;
• Abilities/Skills;
• Personal suitability, and
• Competence in either or both official languages.

In establishing essential qualifications, it is important to ensure that they are relevant to the position. For example, where proficiency in the use of a particular type of software is identified as an essential qualification, the qualification must be based on the requirements of the position.

While essential qualifications may be applied on a “meet/does not meet” basis, the level at which a person meets an essential qualification can be the deciding factor in a selection for retention and lay-off process. For example, the manager could decide that the "right person" for retention should be someone who demonstrates strength in a specific essential qualification - such as writing ability (as opposed to simply meeting the qualification).

Whatever essential qualifications are chosen, all persons need to be informed that they must meet all of the essential qualifications established if they are to be considered for retention.

Official language proficiency

In establishing merit criteria, managers should keep in mind that official language proficiency can only be an essential qualification.

Managers should refer to the TBS Policy on Official Languages for Human Resource Management and its Directive on the Linguistic Identification of Positions or Functions for further information on setting language requirements of positions. As well, the Official Languages Act (OLA) states that the application of official language requirements to positions must be objective.

If effective performance of the continuing positions requires that managers re-examine the linguistic requirements of positions, or change the levels of proficiency required of bilingual positions, then any changes must be taken into account in setting the qualifications for selection for retention and lay-off. Employees who will be assessed for retention and lay-off should be informed of any such change as soon as possible.

Establishing the other merit criteria

Merit criteria other than essential qualifications need not be applied to each selection for retention and lay-off process or to each decision for each position within a given assessment process. This means that employees can be identified for retention and lay-off even though they do not meet the other criteria. Managers should inform employees when some, but not all, of the other merit criteria will be applied to some, but not all, of the positions.

While all essential qualifications must be assessed, there is no obligation to establish and assess other merit criteria. Managers could limit their selection only to employees who meet the essential qualifications, or they could also decide to include some of, or only, those employees who also meet certain other merit criteria.

Examples of how some other merit criteria may be determined are:

• A government office serving an area which includes a major ethnic community used to have a number of officers who spoke the language of the community. After downsizing, all the officers retained will be expected to deal regularly with the members of this community so that the language in question will become an essential element for efficient services. Alternatively, if operational requirements dictate that a certain number of staff possess the language skills of the community, but not all, then it would be appropriate to apply that skill to the selection of some employees, but not to others, or to apply a higher level of skill to some but not to others.
• The number of clerical positions is being reduced from 10 to 6 positions. Even though all job descriptions are similar and have the same word processing requirement, in the past four years, most of the word processing was done by employees occupying certain positions. After the reduction, all the employees retained will be expected to do word processing. In this context, it would be appropriate to establish the ability to do word processing as a qualification. Indeed, some of the employees who did not do much word processing might be weak in this skill, which is crucial for the continuing work of this unit.
• An organization provides both in-lab and field sample collection work in support of a regulatory program. The field work is carried out by technicians who have to drive vehicles provided by the organization. Some technicians did both field work and lab work; others preferred to do only lab work. As a result of downsizing, all the technicians who will be retained will have to do both lab and field work as required. Possession of a valid driver's licence could thus become an operational requirement and a condition of employment needed in the future.

Step 4 - Communicate decisions to employees

It is important to keep employees advised throughout the work force adjustment process of major decisions affecting them. This step is important because at this stage managers have made critical decisions which will affect not only the life of the organization but, more importantly, will affect the lives of employees. It is important that employees have this information as soon as practicable in order to help them make important decisions about their own lives. The communication with employees should cover the following:

• the business and human resources plans of the organization, as a context for the elaboration of the work force adjustment process;
• the services and information available to affected employees and the career transition plans of the organization respecting affected employees;
• the numbers of persons to be retained and laid off;
• the merit criteria, including the definitions and relative weighting and rationale which will be applied in the assessment to determine who to retain and lay off;
• the overall process and expected timing of the assessment for retention and lay-off;
• the methods of assessment if known at this stage (if not they would have to be communicated when known);
• an invitation to employees to identify any accommodations that may be needed for the conduct of the assessments;
• an opportunity to self-identify as a member of an employment equity group if the merit criteria include employment equity considerations;

Early and frequent communication does not mean that a manager cannot change his or her mind about the criteria or how they will be applied, but this should be avoided if possible. For any such changes, the manager should be able to explain the rationale for the change in clear terms related to the needs of the position and the organization.

Step 5 - Assessment and selection

The PSC’s Policy on Assessment states the following:

• the assessment is designed and implemented without bias, political influence or personal favouritism and does not create systemic barriers;
• the assessment processes and methods effectively assess the essential qualifications and other merit criteria identified and are administered fairly; and
• the identification of persons who meet the operational requirements and organizational needs is carried out objectively.

A further explanation of the policy statements shown above, the underlying principles and their application, may be found in the PSC Guide to Implementing the Assessment Policy and should be consulted in addition to this document.

The objective of the assessment process is to ensure that the persons selected for retention are qualified to perform the continuing functions of the job and that, collectively, they will meet the needs identified in the organization’s human resources plan for the affected part of the organization. In order to ensure that the right person is selected and retained, appropriate assessment methods must be chosen or developed so that the identified merit criteria can be thoroughly assessed.

There are various methods of assessment. Section 36 of the PSEA states that the “…the Commission may use any assessment method, such as a review of past performance and accomplishments, interviews and examinations, that it considers appropriate to determine whether a person meets the qualifications...”.

Collectively, assessment methods must be able to produce results (information) relevant to all of the qualifications being assessed. The amount of information needed to assess a person’s competence with respect to a particular qualification depends on the nature and the importance of the qualification, as identified by the manager. The use of multiple, well-developed assessment tools usually provides more complete and valid information and the integration of information from more than one source ensures a more complete and accurate picture of the persons being assessed. Conversely, a single well-developed assessment tool could be used to assess a group of qualifications.

Assessment should be seen as a process, rather than just the administration of individual assessment tools. To increase efficiency, human resources advisors can help managers identify assessment tools that complement each other and those that can assess more than one qualification. The Assessing for Competence Series provides additional information on the development and use of various assessment approaches, including information on setting cut-off scores (or pass marks), determining linguistic profiles for bilingual positions and the assessment of persons with disabilities.

The choice of assessment tools can be affected by various factors, for example:

• operational issues such as development or purchase costs,
• the availability of standardized tests from the private and public sectors,
• the quality and proven validity of available tools,
• the ease of acquisition and administration,
• the speed with which results can be obtained,
• the nature of the results that are provided,
• the availability of experienced and competent individuals to participate in the assessment process,
• the number of persons being assessed,
• the level and complexity of the position,
• the availability of assessment tools in both official languages,
• their adaptability for accommodation to various needs, and
• whether the tests in question require PSC approval (e.g., personality and intelligence tests).

First and foremost, the decision as to which assessment tools to use in a particular process should be based on the effectiveness with which the tools assess the qualifications identified for the position (e.g., that they measure these qualifications accurately). For instance, while a single-question interview may be quick and inexpensive to create and administer, its ability to assess all of the merit criteria might be questionable.

Existing documents such as descriptions of an employee’s past performance might be the primary source of information where the jobs that remain are not changing in a significant way. However, different sources of information enhance the assessment process and permit an evaluation of the consistency of performance over time, and across various situations. It is usually more appropriate to use additional assessment tools in combination with already existing information such as performance appraisals.

As in the case of an appointment process, managers may call upon the services of others to assist in the assessment. For example, the assessors may assist in the conduct of interviews or the review of performance appraisals. The role of such persons is to provide the manager with an assessment, but it is the manager who is responsible for the retention and lay-off decisions.

The manager must ensure that the persons selected for retention meet the essential qualifications and managers’ selections may also “have regard to” the other merit criteria established at the outset - the asset qualifications, operational requirements and organizational needs.

This does not mean that all of the other criteria must be applied in every case or in any particular order. Managers have the flexibility to apply criteria as required to select the person who is to be retained within the context of the continuing position(s) in question. So, although employees being retained must always meet the essential qualifications, a manager may determine who meets an organizational need or an operational requirement before assessing the essential qualifications of those who have met the other criteria if it is more efficient to do so.

For example, a manager could choose to apply the exact same criteria in the same way and with the same weight to the filling of all the remaining positions where the needs of all those positions are truly the same. On the other hand, the continuing functions of the affected organization, possibly including anticipated future needs, may be better served by retaining a mix of individuals; this would be achieved by applying different combinations of the merit criteria on the Statement of Merit Criteria (as long as all those retained meet all of the essential qualifications). This recognizes that even though the employees are being assessed for retention in basically similar positions, in reality the emphasis in some positions may not be exactly the same as in others. Thus, the manager has the flexibility to select for retention those persons who, collectively, best reflect the differences in skills, organizational goals, or future directions required. As a result, a manager could choose a group of employees, all of whom meet the same essential qualifications, but who possess different asset qualifications or meet other requirements.

This raises the question of the degree to which managers should provide an opportunity to employees to acquire the merit criteria required. This will vary with the nature of the criterion, the time required to acquire it, and the operational reality of the organization. For example, if the employees do not have a driver's licence, should they be given the opportunity to obtain one or if they lack a required level of knowledge or of word processing skills, should they be given an opportunity to obtain them? In answering such questions managers should consider whether operational needs can accommodate the time required to meet the criterion before the selection for retention and lay-off must be conducted.

Examples of other questions the manager may wish to consider in this situation are:

• What would be the next step if an employee fails to obtain a driver's licence?
• Will the manager wait until the employee can try again to obtain a driver's licence?
• Is there another way that the employee could get to the field work locations?
• Is the manager certain that there would be no work for this employee if the driver's licence took some time to obtain or could not be obtained?
• What if the employee is providing fully satisfactory lab work, but is visually impaired to the extent that driving is not possible?

There are no easy answers to these sorts of questions. In resolving such issues, managers must try to achieve a reasonable balance between operational reality, such as the impact of a delay in conducting the selection, and fairness to the employees involved. If possible, the manager should give employees sufficient advance notice that the employees can take the necessary actions prior to the selection process for retention and lay-off.

In all situations, managers must respect the Policy on the Duty to Accommodate Persons with Disabilities in the Federal Public Service. This policy's goal is to ensure the full participation of persons with disabilities in the federal public service by creating and maintaining an inclusive, barrier-free environment.

Finally, it is not necessary to rank-order the persons who have been assessed, but it is necessary that managers be able to explain their decisions to employees.

Further information about assessment methods may be found at on the Personnel Psychology Centre’s Web site.

Step 6 - Communicate results to employees - information and feedback

Subsection 21(5) of the PSER and the Work Force Adjustment Directive require deputy heads to inform employees who have been declared surplus of the proposed lay-off date. Organizations must also inform the PSC of the surplus or lay-off status of each person by registering the person in the Priority Information Management System (PIMS).

Managers are encouraged to inform employees, on an individual basis, as soon as practicable, that they have not been selected for retention and will be declared surplus and may be laid off. Managers should be prepared to discuss and explain the assessment results to these employees. Thus, it is important to ensure that the manager has confidence in the assessment and that it is sufficiently documented in order for the manager to clearly explain the assessment to the affected employees.

Information provided to an employee would relate only to that person. Keep in mind that the Privacy Act protects personal information and any information about a third party must not be disclosed.

5. Recourse: Complaints to the Public Service Staffing Tribunal

Section 65 of the PSEA provides that where some, but not all of the employees in a part of the organization are informed that they will be laid off, any employee selected for lay-off may make a complaint to the Public Service Staffing Tribunal (PSST) on the grounds that his or her selection constituted an abuse of authority. As stated in Subsection 2(4) of the PSEA, abuse of authority includes bad faith and personal favouritism.

No complaint may be made against the decision to lay off employees, against the determination of the part of the organization and positions to be affected, or the number of employees to be laid off.

Where the PSST finds a complaint to be substantiated, it may set aside the decision to lay off the complainant and order the deputy head to take any corrective action that it considers appropriate.

A full listing of the PSST’s mandate and procedures (including the timing of submissions) may be found on the Tribunal's Web site.

6. Conclusion

The identification of the employees who are to be retained and those who are to be declared surplus and laid off (if not placed during their surplus period) must be tied to human resources plans linked to the organization’s business plans. The merit criteria should be chosen carefully in order to meet the requirements of those plans. In accordance with section 21 of the PSER, each employee occupying a similar position in the affected part of the organization must be assessed and selected for retention on the basis of merit. This will allow for the operational plans to be realized. To maintain individual and group morale, it is strongly recommended that bargaining agents be consulted (as per the work force adjustment agreements) and that employees be advised of the organization’s plans and the means and rationale for the assessment as early and as often as appropriate to the situation.

Further information about merit and assessment is on the PSC’s Web site and, in particular, the Guide to Implementing the Assessment Policy.

Further information about work force adjustment and the related policies of the employer may be found under “Policies” of the Treasury Board Web site.

7. References

Legislation

• Public Service Employment Act (PSEA)
• Public Service Employment Regulations (PSER)
• Public Service Official Languages Appointment Regulations (PSOLAR)
• Official Languages Act (OLA)
• Public Service Official Languages Exclusion Approval Order (PSOLEAO)
• Financial Administration Act (FAA)
• Public Service Rearrangement and Transfer of Duties Act

Other References

• Public Service Commission (PSC)
• Assessing Merit
• Guide to Implementing the Assessment Policy
• Assessment Tools for Selection and Development
• Priority Administration: Information on the administration of entitlements to be appointed in priority to others.
• Treasury Board Secretariat (TBS)
• Work Force Adjustment
• Term Employment Policy
• Public Service Human Resources Management Agency of Canada (PSHRMAC)
• Qualification Standards
• Government of Canada Staffing Toolkit for Managers
• Public Service Staffing Tribunal (including Regulations)

8. Questions and answers

1. What should happen if new positions are created as a part of work force adjustment?

Sometimes work force adjustment or downsizing coincides with reorganization or work-plan changes that result in the creation of positions which cannot reasonably be considered as similar to the positions from which employees are to be laid off. In such cases, a selection process to determine who to retain in their ongoing positions and who to lay off is not an appropriate way to deal with the situation. Such situations call for appointments to new positions.

Two courses of action are generally available:

• Hold an internal appointment process (advertised or non advertised), subject to priority clearance from the Public Service Commission (PSC). Those incumbents of the "old" positions who would not be appointed to the new positions would be the ones who would be subject to being declared surplus.
  
  The organization could choose to restrict the process to the employees in the affected units and groups and levels, since employees unsuccessful in the appointment process could be declared surplus.
  
  In seeking priority clearance, the manager might consider applying section 43 of the PSEA as a part of the request, since that section provides delegated managers with the flexibility to not make a priority appointment of a person from outside the affected part of the organization if doing so would cause another employee to be declared surplus. This would result in the PSC’s priority system issuing an automatic clearance without referring otherwise potentially qualified priority persons. Of course, if an employee within the affected part of the organization meets the essential qualifications for appointment to the new position then the manager is obligated to appoint that person in advance of others.
  
• Declare all the incumbents of the "old" positions surplus in accordance with the Work Force Adjustment Directive (or other policy and agreements) and consider them as priority persons for the new positions in accordance with the Public Service Employment Regulations, 2005 (PSER), appointing those who meet the essential qualifications.
  
  This second approach may be considered less desirable because it limits the flexibility available to the manager. The manager can only look at essential qualifications when appointing pursuant to a priority entitlement. In addition, the second approach could impose additional stress on employees who might not otherwise have to be declared surplus.

2. What constitutes a “new” position?

Managers should consult their classification advisor and the Guidelines on Reclassification, particularly the subsection entitled “Establishing a New Position”. One useful indicator that a new position has been created is when there is a change in functions of such a significant or substantial nature so as to call for additional or special qualifications; however, this is not the only factor to be considered.

3. Is it necessary to assess an employee's knowledge as part of the process of selection for retention and lay-off?

Not necessarily. The merit criteria must collectively cover the work to be performed, including knowledge, as needed.

However, in some cases, specifying a certain merit criterion implies possession of another merit criterion. For example, the ability or skill to apply knowledge may in some circumstances, presuppose the possession of that knowledge. Another example would be a simulation that requires a certain level of knowledge in order to demonstrate abilities and personal suitability.

In other circumstances, new knowledge may be required that was not required of the employees before, or may be required because the continuing positions (though similar) are not identical. In such cases, it may be reasonable to select on the basis of aptitude to learn and apply the new knowledge. In any event, the principles in the employer’s Qualification Standards apply and managers must determine whether or not employees must possess the knowledge to be selected and whether, if required, it would be an essential qualification or an asset qualification.

4. Could an employee’s self assessment be used as one of the assessment tools?

No. An employee’s self-assessment would not be acceptable. It is a management responsibility to assess employees for retention or lay-off. In addition, self-assessments are not reliable indicators of future performance.

However, managers may use information provided by employees, as distinct from a self-assessment by an employee. For example, employees can be asked to provide verifiable behaviour-based descriptions of their performance from their own experience to illustrate the degree to which they possess some of the merit criteria (usually abilities or personal suitability factors). Managers would then verify and assess the information provided by the employees against predetermined criteria. The most likely approach would be to use the information in conjunction with information obtained from other sources, such as reference checks or performance appraisals. The PSC and a number of organizations have information available on how to conduct behaviour-based assessments (see “Reviewing Past Accomplishments” in the Assessing for Competence Series of the Personnel Psychology Centre.

5. Should employment equity considerations factor into determining whom to retain and whom to lay off?

Maintaining or achieving employment equity objectives goals may be one of the criteria on the Statement of Merit Criteria (an organizational need) and could become critical to the selection. Managers must ensure that this is a need reflected in the organization’s employment equity or human resources plan.

Of course, the requirement for employees to self-identify should be made known beforehand to the employees who are to be assessed for retention and lay-off if this is to be applied.

6. How is an employee’s second official language assessed in a selection process for retention and lay-off?

Official language proficiency in a bilingual position is assessed on a “meets/does-not-meet” basis using the Second Language Evaluation (SLE) test, except where the second language requirement of the position has been identified as code “P”. For further information see “second language evaluation" and Section 3.2 (Essential Qualifications) of the present document.

7. How are employees who are in acting appointment situations treated in a process for selection for retention and lay-off?

Employees in acting appointment situations should not be included in a selection for retention and lay-off process which includes the position in which he or she is acting.

However, “acting” employees should be included in any selection for retention and lay-off process which affects their substantive position.

Although there may be some discretion available, a suggested a best practice in most situations would be to not only assess “acting” employees who are not in their affected positions for retention and lay-off as outlined above, but to also return “acting” employees who come from other areas to their substantive position in their “home” organization before starting the selection for retention and lay-off process.

For more information, see section 2 of the present document.

8. How are secondments or assignments handled in a process to select employees for retention and layoff?

The principles that apply to acting situations also apply to secondments or assignments. See the above answer with respect to employees in acting appointment situations.

9. How do you handle personal information concerning employees involved in a selection for retention and lay-off process?

Managers must respect the Privacy Act, which protects personal information relating to a third party.

Employees assessed in a selection for retention and lay-off process must be provided with sufficient information concerning themselves to understand the decision. The information provided should relate only to that employee. This information could include any factors that were taken into account, including the merit criteria used, how the assessment was carried out and the person’s assessment results.

Before the selection retention and lay-off process begins, managers are also required to inform employees of the merit criteria that will be applied. For example, this would include the intent to either restrict consideration to members of a designated employment equity groups or to consider such membership in the overall process.

Communicating this criteria and intent could lead to the characteristics of the employees who are retained to be deduced by other employees with some degree of accuracy. This could include conclusions about an employee belonging to a designated employment equity group, as well as his or her other attributes, such as knowledge or skills. Employees should be aware that, when they self-identify as members of a designated employment equity group for the purpose of the selection process, their membership might be accurately deduced by other employees, by virtue of the outcome of the process. This would of course, depend on the number of employees assessed and the application of membership in a designated group in the selection process.

If an employee files a complaint with the Public Service Staffing Tribunal (PSST), access to information concerning the process, about himself or herself and about third parties must be in accordance with the PSST regulations and policies. See section VI of the present document.

Any questions respecting privacy and access to information should be discussed with the organization’s privacy and access to information experts.

10. Can the Personnel Psychology Centre (PPC) tests be used in a selection for retention and lay-off?

Yes, PPC tests can be used. For information about PPC tests and services, consult its Web site or telephone (613) 992-9741.

11. Can a manager use a particular merit criterion as a screening tool before proceeding with a selection for retention and lay-off (e.g., declaring surplus everyone who does not meet that qualification and limiting the selection process to those who do meet it)?

This may be an appropriate course of action, especially in a work force adjustment situation that involves a large number of employees and few remaining positions. Any merit criterion may be used as a screening tool in this way. Employees who do not meet that criterion would not be considered further for retention, and would be identified for lay-off.

12. How do you manage a selection for retention and lay-off process which involves one or more salary-protected employees occupying positions at the level at which the adjustments are to take place?

Salary-protected employees are considered only in selection for retention and lay-off processes that involve the positions in which they are employed. This means that the selection has to do with the classified level of the position occupied by the employee only, rather than the level of the salary protection.

13. There is a term employee in the area of adjustment who has just, or will shortly achieve, three years’ service. Should that employee be included in the selection for retention and lay-off process?

Section 59 (1) of the PSEA states that:

Unless the employee requests otherwise of the deputy head, the period of employment of an employee who is employed for a specified term as a result of an appointment or deployment is converted to indeterminate in the employee's substantive position, at the end of the cumulative period of employment specified by the employer in circumstances prescribed by the employer.

Conversion to indeterminate status is automatic if it meets the conditions prescribed by the employer and it is effective as of the anniversary date of the person’s initial appointment. Therefore, if that date has passed, the employee should be included in the assessment for retention and lay-off process. If the date has not yet passed, then the term employee should be treated in accordance with the policies and collective agreements of the employer respecting the lay-off of terms who are nearing the conversion date. Note: Term employees who are laid off are not entitled to a priority for appointment.

14. Can the results of a selection for retention and lay-off process be used a second time, for example, several months after the results were initially determined?

Yes, the results may be used more than once, but before doing so, management must ensure that:

• in the intervening time it is unlikely that the merit of the affected employees has changed significantly;
• there are no new employees in the area of adjustment occupying similar positions of the same group and level as who had originally been assessed; and
• a further notice of the new application of the results is provided to the employees, including notification of their right to recourse.