The largest public service union is seeking the intervention of a federal judge to stop unexpected reductions in paycheques for its members suspected to have been overpaid five years ago.According to a filing in the Federal Court by the Public Service Alliance of Canada (PSAC), nearly a thousand of its members had their pay reduced without receiving any prior notice or explanation.“The department of public works erred in law, including by exercising its discretion in bad faith and arbitrary manner, failing to provide notice of the alleged overpayment recovery without justified reason,” PSAC lawyers wrote the Court. Cabinet has not yet filed a response.The union said it discovered on September 26 the department responsible for processing payments “was planning to recover alleged overpayments from 2018 valued at up to 10% of gross biweekly pay from employees.” According to Blacklock’s Reporter, management confirmed it clawed back cheques for 969 workers at Parks Canada, the Canada Border Services Agency and other agencies.Federal debt collectors “failed to consider individual employees’ circumstances,” including “employees’ current financial situation,” wrote union lawyers. They wrote that employees were also given no chance to answer claims they were overpaid five years ago.The payment problems began with the 2016 Phoenix Pay System, a software program aimed to combine 46 different federal payroll departments, promising annual savings of $70 million. However, it did not work as intended and led to various issues.Instead of working correctly, the program made errors in the paycheques of thousands of federal workers. Fixing these issues and providing compensation has cost more than $2.8 billion so far.In a 2022 memo Phoenix Salary Overpayments, the public works department estimated 120,000 current and former employees received too much money and had not repaid it. “Outstanding salary overpayments stand at approximately $559 million,” said the memo.It said the number of overpaid employees peaked at 372,000, with owed refunds totalling $3.02 billion. “Thousands of current and former federal employees have reimbursed overpayments or made arrangements to do so,” wrote the department.Auditor General Karen Hogan, in an October 27, 2022, report, predicted a half-billion dollar write-off under Phoenix Pay errors. “Pay action requests involving overpayments have been outstanding for several years,” Hogan wrote in a Commentary on the 2021-2022 Financial Audits. “This means the government could have fewer options to recover the amounts owed, which may eventually result in the amount being written off.”The Auditor General reported even though billions of dollars were spent to fix the Phoenix Pay System program, it still made mistakes with paycheques for a significant number of employees, approximately 1 in 4.“In our audit work, we found 28% of employees we sampled had an error,” said Financial Audits.“We performed detailed testing of a sample of federal employees’ pay transactions,” wrote Hogan. “We expect the government will return to having pay processes that ensure employees are paid accurately and on time. This expectation remains regardless of whether the government keeps its current pay system for some organizations or implements a new one.”
