Collective Agreement
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Collective Agreement

Please note that the FAQs have been updated on August 1, 2012. New FAQs are identified with "*".
Please note that new FAQs have been added on September 14, 2012. New FAQs are identified with "**".
Please note that new FAQs have been added on March 18, 2013. New FAQs are identified with "***".
Please note that new FAQs have been added on April 10, 2013. New FAQs are identified with "****".


What happens if the ratification vote is defeated?
If the ratification vote is defeated, the parties will set new arbitration dates. Note that no result can be guaranteed. If the matter proceeds to arbitration, the terms and conditions of the collective agreement set by an arbitration board could be better or worse than those contained in the tentative agreement.

Does this tentative agreement resolve the 2006 base rate of pay that is the subject of the current ERA constitutional challenge?
[Please note that now that the ERA constitutional challenge has been exhausted, this question is no longer relevant]

No, the current tentative agreement does not address the outstanding issue raised in the context of the ERA constitutional challenge. More specifically, the appropriate 2006 base rate of pay, many will recall, was never negotiated as a result of the ERA establishing maximum statutory increases for a year during which no economic crisis existed.

Accordingly, to the extent the AJC´s constitutional challenge is successful and appeal rights have been exhausted, LA rates of pay may be the subject of further retroactive improvements dating back to 2006 following further negotiations or interest arbitration.

If the 2006 rate of pay were adjusted as a result of a remedy that flows from the ERA challenge, is there a possibility that the current rates set out in the tentative agreement will be adjusted upwardly?
[Please note that now that the ERA constitutional challenge has been exhausted, this question is no longer relevant]

In order for the rates to be upwardly adjusted by a remedy in the Charter case, such an upward adjustment would have to flow from an order by the Court as part of the Charter remedy, which may result in the matter being referred back to arbitration or negotiation.
What salary increases and performance increases will LA-DEVs to LA-2Bs receive on May 10, 2013?
There are 3 pay actions that would occur on May 10, 2013:

Step1:12% salary increase (2% plus 10%)
Step2:Conversion to the new lockstep system.  LA's (up to LA2Bs) who are not at the max of their range will move to the next step that is closest to, but not less than, their rate of pay (see Annex A of our Summary of the deal on the website for the lockstep numbers)
Step3:immediately following step 2, if you are not at the max of your pay range, there will be a pay increment to the next highest step in the pay range.  

Every May thereafter, you will continue to move up the lockstep provided you get the “Meets All” or “Exceeds” performance rating and meet the existing eligibility requirements (on strength as of March 31 and April 1).

The following examples illustrate the pay progression for an LA-1 and an LA-2A, outside Toronto, earning $72,000 and $100,000 respectively at the expiry of the last collective agreement (May 9, 2011)

LA-1 earning $72,000 and rated "Meets All" (Table revised on July 9)


May 10, 20111.75% economic increase$73,260
October 1, 20114.6% PREA in-range adjustment$76,630
April 1, 20124.6% PREA in-range adjustment$80,155
May 10, 20121.5% economic increase$81,357
October 1, 20124.6% PREA in-range adjustment$85,099
May 10, 201310% pay restructure$93,609
May 10, 20132% economic increase$95,481
May 10, 2013conversion to lockstep$98,936
May 10, 2013pay increment on lockstep range - (no pay increment because top of lockstep range)$98,936
May 9, 2014expiry of collective agreement
May 10, 2014PREA lump sum performance award up to 4.6% of salaryTBD
May 10, 2014no pay increment because top of lockstep range$98,936 plus economic increase in next collective agreement

LA-2A earning $100,000 and rated "Meets All"


May 10, 20111.75% economic increase$101,750
April 1, 20124.6% PREA in range adjustment$106,430
May 10, 20121.5% economic increase$108,026
May 10, 20132% economic increase$110,187
May 10, 201310% pay restructure$121,206
May 10, 2013conversion to lockstep$125,785
May 10, 2013pay increment on lockstep range$131,697
May 9, 2014expiry of collective agreement
May 10, 2014pay increment on lockstep range$137,887 plus economic increase in next collective agreement

To see how the tentative agreement would apply to your situation, you can download our Pay Increase Calculator.
What salary increases and performance increases will LA-3s get on May 10, 2013?
There are 2 pay actions that occur on May 10, 2013.

Step1:12% salary increase (2% plus 10%)
Step2:PMP plan continues to apply as outlined below.  In-range pay movement and lump-sum performance awards for lawyers at the LA-3 levels will continue to be governed by the PMP performance pay regime at Appendix C of the expired collective agreement.

How does the Performance Pay Plan that applies to LA1s, LA2As and LA2B´s work under the tentative agreement?
Under the agreement in principle, a number of augmentations and changes will be made to performance pay.

First, and most importantly, the tentative agreement, if ratified, will reduce the employer's discretion to advance your wages through the salary scale. This will be accomplished by moving to a "lock-step" system, which eliminates "up to" language and makes incremental salary increases through the scale automatic until you reach the salary ceiling.

Second, the rate at which everyone will move forward through the lock-step system (who are not at the salary ceiling) is 4.7%. This is slightly higher than the current 4.6% increase the vast majority receive for a "fully meets" performance rating.

Third, when you hit the salary ceiling, there are no more "steps". However, you will remain entitled to a lump-sum amount which will be based on performance. The vehicle for delivering lump sum amounts at the ceiling is basically the same as the current performance pay plan. In other words, 4.6% for a "fully meets" and 7% for an “Exceeds”.

These are the changes to the new lock-step / performance pay system in the most general of terms. Additional specifics are provided below.

In-range increases

Until the introduction of the lock step pay ranges on May 10, 2013, in-range increases (i.e., annual increases for lawyers not at the top of the pay range) for LA-1, LA-2A and LA-2B will continue to be governed by the performance pay plan.

For the in-range increase effective April 1, 2012, a Fully Meets assessment will result in a 4.6% in-range increase and an Exceeds will result in a 7% in-range increase.   An “Unsatisfactory” or “Unable to Assess” rating will result in no in-range increase.   The previous “outstanding performance” rating that allowed for a performance award of up to 10% of salary has been eliminated.    

Under the current performance pay plan, it is within management´s discretion to give LA-1s an-in range increase on a semi-annual basis. The tentative agreement removes this discretion and provides that all LA-1s are to receive another in-range increase effective October 1, 2012. The increase will also be 4.6% for “Meets All” and 7% for “Exceeds”.

When the lock step pay ranges come into effect on May 10, 2013, in-range increases for lawyers at the LA-1, LA-2A and LA-2B levels who are not at the top of the pay range will no longer be governed by the performance pay plan. Instead, lawyers at these levels will progress through the steps on the lock step pay range. A move from one step on the pay range to the next higher step is referred to as an increment. The first increment on the lock step pay ranges will be on May 10, 2013. The increment on May 10, 2013 will take place after the 12% pay increase that occurs on that day and after the conversion to the lock step pay range. The percentage increase between increments effective May 10, 2013 will be 4.7% for the balance of the collective agreement.

Subsequent pay increments for LA-2A and LA-2B will be every 12 months and every 6 months for LA-1.

Lump sum Performance Awards

The performance pay plan also provides that lawyers at the top of the range will receive lump sum performance awards based on their assessed performance. This part of the performance pay plan will continue to apply to lawyers at the LA-1, LA-2A and LA-2B levels when they are at, or once they reach, the maximum of the pay range. Lawyers who are at the maximum of their pay range on April 1, 2012 will receive a lump sum performance award effective April 1, 2012. The lump sum will now be 4.6% of salary for “Meets All” and 7% for “Exceeds” (rather than “up to”).   The previous “outstanding performance” rating that allowed for a performance award of up to 10% of salary has been eliminated.  

As is currently the case, lawyers who receive a rating of “Unsatisfactory” or “Unable to Assess” will not receive a performance award.

The introduction of the lock step pay ranges on May 10, 2013, does not affect entitlement to lump sum performance awards for LAs at the top of the pay range. Performance awards will be paid effective May 10th of each year, instead of effective April 1st. For performance awards payable on May 10, 2013 and May 10, 2014, the lump sum will be “up to 4.6%” and “up to 7%” for lawyers at the top of the scale in accordance with the terms of the performance pay plan in the expired collective agreement. The Deputy Heads of DOJ and PPSC have confirmed in writing that, within the limit of their authority, awards will be 4.6% for “Meets All” and 7% for “Exceeds”.

4.6% and 7% for LA1s at the May 10, 2013 maximum rate of $98,936 represents $4,551 and $6,925 respectively.

4.6% and 7% for an LA-2A at the May 10, 2013 maximum rate outside Toronto of $137,886 represents $6,342 and $9,652 respectively.


On a new appointment, does the date on which an LA is eligible to a new pay increment change?
Initially, everyone starts off with an increment date of May 10th and for people who just stay at their current level, their increment date will remain May 10. The pay increment period however is 12 months (6 months for LA-1). This means that if there is a new hire on September 1 for example, an LA´s increment is the following September 1. If someone is promoted into a new position on July 1, he or she gets a raise on promotion and then their next increment on their new pay range is the following July 1. But over time, increment dates will gradually change as people join the bargaining unit, get promoted, etc.
How does the Performance Pay Plan that applies to LA3´s work?
There is no change. In-range pay movement and lump-sum performance awards for lawyers at the LA-3 levels will continue to be governed by the PMP performance pay regime at Appendix C of the expired collective agreement.
Would the tentative agreement have any impact on the denial or prorating of performance pay in-range increases for lawyers on maternity or parental leave?
Under the expired agreement, the employer was entitled, according to an adjudicator' decision of March 2012, to deny performance pay related in-range increases to people who did not work long enough during the year to permit a meaningful evaluation of performance.  People who may have been on maternity or parental leave found their performance pay in-range increments prorated in accordance with the length of time actually worked during the year where such an evaluation could be performed.

While sections 19.03(g) and 19.06(g) of the expired collective agreement (which provisions remain unchanged following the tentative agreement) provide that “time spent on [maternity leave or parental leave] shall be counted for pay increment purposes”, the adjudicator ruled that the in-range increases under PREA are not considered “increments.” He held “increments” in this context refers to steps on a lockstep pay range such as existed in the former PIPSC LA collective agreement.

Under this tentative agreement, once the lock step system comes into effect on May 10, 2013, it is the AJC´s view that the adjudicator´s interpretation of s. 19.03(g) would mean that an LA on maternity or parental leave will move a full step on the lock step range on their normal increment date, regardless of the number of months worked in the year, unless they receive an “Unsatisfactory” assessment.

For employees on maternity or parental leave at the top of the lock step range, the AJC is of the view that the adjudicator´s decision would continue to apply to “performance awards”, i.e., lump sum payments for people at the maximum of the range. Under the Adjudicator´s decision, clause 8.2 of the performance pay plan at Appendix B would continue to apply. Such employees who are assessed as “Unable to Assess” (at work for less than approximately 4 months) would not be eligible for a performance award and performance awards would be prorated to the length of time such employees were at work during the fiscal year.


What is up with severance pay?
Generally, severance pay relates to amounts paid by an employer where the employer either lays off or terminates an employee. This payment is generally intended to bridge the loss of salary between your last day of work and the day on which you can expect to secure new employment.

In the federal public service, however, there were provisions in collective agreements that provided for payments based on your years of service that become payable following your resignation or retirement date.

The tentative agreement eliminates the accumulation of severance pay only for voluntary resignations and retirements beginning on the date the agreement is signed. At that time, you will be entitled to choose between the immediate payment of severance pay accumulated since you were hired,  the deferral of such payment to your termination of employment from the core public service or a combination of thereof, as you consider appropriate. Please note that if you choose the immediate payment option, the payment will be based on the pay rate applicable on March 12, 2013. If you defer the payment to your termination of employment from the core public service, the payment will be based on the pay rate which is applicable at the end of your employment.

Severance pay for laid-off, terminated  (for cause for reasons of incapacity or incompetence) or deceased employees remains in effect and continues to accrue based on your years of service.   Section 22.02 of the tentative agreement provides that the period of continuous employment used in the calculation of severance benefits payable to a lawyer shall be reduced by any period of continuous employment in respect of which the lawyer was already granted severance pay, retiring leave or a cash gratuity in lieu of retiring leave.    In addition, there shall be no pyramiding of the maximum severance pay provided under clauses 22.01 and 22.04.  

Based on AJC´s actuarial evidence, the elimination of future accrual of severance pay as provided in the tentative agreement would be fully offset with a 1.75% increase in salaries. The Employer´s view was that there should be a .75% increase in pay to offset the elimination of future accruals of severance pay.  


Did the Negotiations Team seek membership input?
Yes.  Prior to providing notice to bargain in March 2011, and more specifically in December 2010, the AJC Negotiations Team called for membership input. A ranking chart was distributed to members allowing them to outline their priorities.

Additionally, members were encouraged to contact their local Governing Council Representatives or speak with a member of the Negotiations Team. Members were encouraged to ask questions and say what matters most to them. An email address was also created to allow members to forward their suggestions directly to the bargaining team. Of the recorded 1039 responses to the member questionnaire that was sent out, annual remuneration for normal hours worked was ranked as the number 1 priority with 792 votes. Compensation for performance was listed as priority 2 with 328 votes. Compensation for excess hours of work through compensatory leave or pay was ranked third with 143 votes. A breakdown of the number of respondents by region and thereafter by department, are set out below.





What does overtime pay represent in monetary terms?
According to the numbers provided by Treasury Board, the information suggests that overtime made up approximately 2% of the pay budget.   For greater clarity, the overtime pay referred to above does not include compensatory leave with pay for which the AJC was unable to obtain data from the employer.
When will overtime and travel time entitlements cease?
Overtime will cease effective April 1, 2013. While the agreement is ambiguous about when travel time ceases, Treasury Board has since confirmed that the same will apply to travel time.
What did the Negotiations Team consider in its decision to give up overtime and travel time effective April 1, 2013?
The negotiation process is about giving and taking and the Negotiations Team gave careful consideration to the majority of the membership´s priorities.  The main priority of the Negotiations Team was to increase base rates of pay.

Other considerations include:
  1. Only LA1s and LA2As are entitled to overtime and travel time
  2. LA-2Bs who work alongside of LA2As and LA-1As often ended up earning less while working on team files, which was creating division and resentment;
  3. Not all LA1s and LA-2As were claiming from the overtime or travel time provisions;
  4. The 15.25% salary increase over the life of the agreement is pensionable income whereas overtime and travel time compensation are not;;
  5. There has been a recent trend by management to impose restrictions on the amount of overtime which may be claimed, including but not limited to, imposing maximum overtime hours per year;
  6. There should be parity among all the classification levels, from LA-DEVs to LA-3s;
  7. Certain patterns of management action that led the Negotiations Team to believe that overtime restrictions would continue to increase;
  8. Numerous members complained about the cumbersome process to claim overtime;
  9. As of May 2013, LA1´s who are at the top of their pay scale will be ranked number 2 nationally.  This only leaves Ontario ahead of LAs at every pay level; and
  10. Overtime made up approximately 2% of the salary budget.
In lieu of overtime, members will however be eligible for management leave. It will resemble the practice that was previously in place for many LAs (excluding former PIPSC members) prior to the AJC´s first collective agreement. Management leave (formerly under our expired agreement referred to as exceptional leave) should no longer be exceptional.

In the granting of leave, management has an obligation to act fairly, in good faith and reasonably, which will no doubt require consideration of the work-life balance provisions already outlined in some of the hours of work provisions. The AJC will be pressing upon management the importance of developing objective criteria and policies that will ensure fair and consistent application of management´s decision to grant management leave across the entire bargaining unit. Beyond 5 days, the local manager will now have input before the deputy head makes a decision on whether or not to grant additional management leave.



What will the AJC be doing to ensure that lawyers´ maintain proper work life balance in the face of possible competing work-related demands that are at risk of being disregarded now that overtime and travel time will be eliminated?
As in the days before the granting of overtime, we will ask members to report any unusual or unrealistic workload expectations. We will seek meaningful data that assures us our members are treated in a manner that coincides with the work-life balance expectations set out in the collective agreement. Some of the telling data may be found through iCase reports, increased absenteeism rates, membership complaints, Peoplesoft, etc.

Sections 13.01(a) and (b) and 13.02 (a) and (b) of the expired agreement will remain in effect:

  • a) The normal hours of work for lawyers shall average thirty-seven decimal five (37.5) hours per week over each four (4) week period.  Subject to the approval of the Employer, the hours of work shall be arranged to suit a lawyer´s individual duties to permit the lawyer to carry out his or her professional responsibilities.
  • b) "In making arrangements for hours of work, lawyers will be permitted reasonable flexibility in the times during which they perform their work, including arrival and departure from the workpalce, to enable them to balance work and family responsibilities."
Section 13.01(i) of the expired agreement which applies to LA1s and LA2As will also continue and states that “[n]othing in this Article is intended to prevent lawyers from having access to the Employer´s existing policies respecting alternate work arrangements, including compressed work week, job sharing, telework, self-funded leave and pre-retirement transition leave.”

If the work life balance is proven to be compromised with the elimination of overtime pay, the AJC will pursue these matters with the employer vigorously and expeditiously.


Does the tentative agreement address the issue of stand-by duty?
Counsel who must work stand-by duty may be entitled to management leave. Clause 13.02(e) of the tentative agreement specifically references this type of work and allows for management leave to be granted “where a lawyer is significantly restricted as a result of being on standby duty.”
I spend a lot of time travelling for which I was compensated under the expired agreement. What should I do now to ensure that I not be forced to travel on weekends?
Section 13 of the agreement provides that the normal hours of work shall average 37.5 hours per week over each four (4) week period. Lawyers are also permitted reasonable flexibility in the times during which they perform their work to enable them to balance work and family responsibilities. The normal work week shall be Monday through Friday, except where a lawyer is required to work on what would normally be a day of rest or a paid holiday in order to carry out his or her professional responsibilities.

Accordingly, should the agreement be ratified, the AJC recommends that to the extent you have the delegated authority to schedule your hearing or meeting dates, you not book Mondays or Fridays that would inevitably require you to travel on weekends.   Alternatively, you may wish to consider the possibility of an alternate work week.  For specific questions or concerns, feel free to contact an AJC Labour Relations Officer at admin@ajc-ajj.com .


LA positions are being reduced. Are the savings generated from these reductions being used to finance the salary increases?
The increases in salary are not linked to job cuts resulting from the government's recent Economic Action Plan. More specifically, the 10% salary restructure in 2013 was explicitly approved by Treasury Board President Tony Clement during negotiations.  Our current information, provided by TB in early July, is that the departmental budget freeze ends for fiscal 2013-14. It therefore appears that the structure and timing for the wage increases were tailored to funding capabilities as between the departments and Treasury Board.
When will the ratification vote be held?
The voting period for the ratification of the Tentative Agreement opened on September 22 at 9:00am (EDT) and will extend until October 5th at midnight (EDT).
 
The period for non-registered LAs to register and obtain voting rights ended on Friday, September 21 at midnight.
 
Registered AJC members should already have received voting instructions by mail. In the case of newly registered members and those who recently updated their home addresses with the AJC, the voting instructions are being sent by e-mail. The email notices are sent by ajc@simplyvoting.com . Please check your "Junk Mail/spam" folders.
 
If you have not received your voting instructions please contact us by email at admin@ajc-ajj.com or by calling our Ratification Vote line at 1-866-218-3310 (ext. 120).
 
Results of the vote will be announced on October 8.


How does this agreement compare to other deals?
At least 9 new collective agreements affecting over 100,000 unionized employees in the core public administration have been ratified, all of which resulted in the elimination of severance benefits for voluntary separation.

Treasury Board subsequently eliminated severance benefits for voluntary separation for approximately 13,000 executives and non-represented employees.

Recently, the medical officers ratified an agreement with TBS that resulted in a 21% pay increase over 3 years, with no concessions other than severance.  15% of that increase was a ´market adjustment´ over and above TBS´s baseline offer.  In addition to the 15% increase, the MD´s retain their overtime compensatory regime.  In 2007, this group had significant retention issues with vacancy rates at 61%.

For more information on their situation, you may consult:  

http://www.pipsc.ca/portal/page/portal/website/groups/sh/pdfs/shcachanges.en.pdf

and

http://www.fhp-pfss.gc.ca/fhp-pfss/publications/fhprpts-rptspfss/physicians-physiciens-eng.pdf


* How does the tentative agreement compare to other awards that resulted in the elimination of severance pay?
We are aware of the arbitral award Communications, Energy and Paperworkers Union of Canada v. House of Commons, in which the employer's request for elimination of severance pay in exchange for .75% was dealt with.  It was under Parliamentary Employment and Staff Relations Act (PESRA), which is the companion federal labour relations legislation to the Public Service Labour Relations Act (PSLRA) that covers people working on the Hill.  The collective bargaining and labour relations regime under PESRA is similar, although not identical, to the PSLRA.  In the recent award for the CEP unit on the Hill, one of the issues was the employer's proposal to eliminate future accrual of severance pay (the severance pay provisions in the contract were identical to the severance pay provisions in TBS agreements).  The employer proposed economic increases of 1.5% for each of 3 years and, if severance pay were eliminated, an additional .75% with .25% in the first year and .75% in the third year, i.e., the PSAC model.  The Arbitration Board upheld the Employer´s valuation of .75% for the elimination of severance pay.  

For more information on this recent PSLRB ruling on the question of severance pay, you may refer to Communications, Energy and Paperworkers Union of Canada v. House of Commons

For PSLRB rulings on recent interest arbitrations, you may consult Communications, Energy and Paperworkers Union of Canada v. House of Commons.
 
You may also see CAPE´s most recent Press Release and Arbitral Award regarding the EC group.  You´ll note that the PSRLB upheld the 0.75% valuation in relation to severance pay.

* When should you expect to receive your retroactive pay adjustments relating to the 2011 and 2012 increases?
You should expect to receive retroactive pay adjustments within 120 days following the signing of the collective agreement.
* What happens if I am on vacation when my voting instructions are mailed to me? Can I appoint a proxy?
If you are on vacation, the AJC encourages you to ask a friend or neighbor to pick up your mail and to get in touch with you once the AJC voting instructions and PIN number are delivered.  You will then be permitted to vote telephonically from wherever you may be vacationing.    You MUST have your PIN number to register your vote telephonically.  No other means of voting is being offered.

A reasonable period of time will be provided to allow for the mail to get to your residence and for you to exercise your right to vote.

Proxies are not permitted.

* If I opt for a severance payout before my actual retirement on account of the termination of the severance pay accumulation benefits relating to my voluntary resignation or retirement, will this payout be treated as a retiring allowance?
Please refer to IT-Bulletin  IT-337R4 for information on what constitutes a retiring allowance.   Should you require further information on the tax implications, we encourage you to seek the assistance of a tax professional.  
* How many votes are required to ratify the agreement?
50% + 1 of the votes cast are required for the purposes of ratifying the tentative agreement.  The AJC encourages ALL MEMBERS to vote to ensure that the will of the majority of the whole of the membership is properly reflected in the end result.  
* Does the AJC Negotiations Team support the tentative deal?
Yes, the AJC Negotiations Team, which receives its mandate from the Governing Council, supports the tentative deal.  
* Will the AJC hold information sessions?
We were originally considering the hosting of a few one-hour bilingual information sessions to supplement the information already available online.  After assessing the costs relating to conference calls, we concluded that it is more cost-effective for the President, also the Chair of the Negotiations Committee, to come to you.  Information sessions will therefore be held in person in the upcoming weeks to help inform members across the country about the tentative agreement.   Members will be encouraged to send any questions not already covered by the FAQs in advance in the interests of efficacy.    A schedule of Lisa Blais´ information sessions has been posted online.
* Will the AJC host a blog or other venue to provide members with a forum to debate the tentative agreement?
No.  Members wishing to share their comments and opinions or engage in debate are encouraged to talk amongst themselves, to speak to their local Governing Council representatives, reach out to members of the Negotiations Team or send their comments or questions to admin@ajc-ajj.com .  We have no current plans to hold formal debates.  
* Article 22.01(a) of the current agreement (which remains unchanged under the tentative agreement) provides for no cap on severance in the event of layoff and article 22.04 of the tentative agreement entitled Severance Termination provides for a cap. Can you confirm whether the tentative agreement has the effect of overriding the “uncapped” provision at article 22.01?
There is still no cap on severance pay in the event of lay-off.  Article 22.04 doesn´t change that.   You cannot however get paid out twice for the same period of service.

Someone who is laid off in future will continue to be entitled to severance pay of 2 weeks for the first year and 1 week for each additional year of service because 22.01(a) is going to remain in the contract.  (Only 22.01(b) and (c) are coming out)    So if a lawyer hired in 1969 is laid off sometime after the new contract comes into effect, he or she still has an entitlement to severance pay on future lay off at 43+ weeks´ pay (see formula under 22.01(a)(i)).  However, if before being laid off that individual opts to take the lump sum payment of 30 weeks´ severance pay pursuant to sections 22.04 - 22.07, article 22.02 provides that when the person is subsequently laid off, the 30 weeks are deducted from the 43+ weeks of severance pay they would have been  entitled to when laid off.

Severance pay on resignation or retirement was previously subject to a cap of 13 weeks and 30 weeks respectively.  The lump sum payout under 22.04 - 22.07 is capped at 30 weeks but that does not reduce the cap that already was in place for severance pay for retirement or resignation.   (The lawyer who has 43 years of service was  only ever entitled to  get 30 weeks of severance pay under the former provisions on retirement;  he or she would only have been entitled to more than 30 weeks in the event of lay off and that entitlement is not reduced by the changes.


** Are the increases provided for in the tentative agreement dependent on my performance rating?
Treasury Board has confirmed that you would be eligible for the economic pay increases (1.75% for 2011, 1.5% for 2012 and 2.0% 2013) regardless of your performance evaluation.

Treasury Board has also confirmed that there is no performance rating requirement in relation with the 10% pay restructure increase on May 10, 2013 and any resulting round up to the next highest step for those LA-DEV, LA-1, LA-2A and LA-2B´s who are not already at the maximum of the range.  

** How are the maternity and parental allowances affected by pay increases that take effect while I am in receipt of maternity allowance or parental allowance?
Sections 19.04(i) and 19.07(i) of the expired collective agreement remain unchanged and provide that: “Where a lawyer becomes eligible for a pay increment or pay revision while in receipt of parental allowance, the allowance shall be adjusted accordingly”.
** Will employees with less than 10 years´ service be eligible to receive a severance payout?
Yes, employees would be entitled to receive payment in accordance with article 22 of the Tentative Agreement for the amount of severance pay accrued from the date of employment until the date on which the tentative agreement comes into force.  While severance pay for resignation or retirement would cease to accumulate on the date the tentative agreement would come into force, severance pay entitlements under articles 22.01(a) (layoff), (d) (death) and (e) (termination) would continue to accrue except that any period liquidated under severance termination will not be compensated again for other separation reasons.
** What does the “for greater certainty” clause mean at section 22.02 of the Tentative Agreement?
The "greater certainty" clause in 22.02 makes employees aware that any period of continuous employment that is "cashed out" in accordance with severance termination provisions (whether under the LA agreement or any other similar provisions in other agreements) will not qualify for "cash out" again.
***Now that the collective agreement is in effect as of March 12, 2013, what happens next?
The employer has until July 10, 2013 to implement the economic and retroactive pay increases and adjustments.  That said, the AJC has made representations to Treasury Board (TB) to reduce the timelines and will continue to exert pressure on TB, the departments and agencies to move quickly.

Overtime and travel time entitlements will cease as of April 1, 2013. From that date, all LAs will be entitled to management leave with pay.

Lump sum performance awards are to be paid out on May 10, 2013.

Notice:  Notwithstanding the above, the AJC and TB recently reached an agreement which harmonizes, for this year only, the payout dates for the PREA and the retroactive pay increases into one date: June 12, 2013. The lump-sum award for those at the top of the scale will be paid by June 12, 2013 in lieu of May 10, 2013, but the employer accelerates the payout of all retroactive pay increases to June 12, 2013 in lieu of July 10, 2013 subject to a few exceptions.  Due to the late implementation date and the many calculations required to get the PREA calculation right, DOJ and PPSC could not meet the May 10 date however, the delay in one payment (PREA) is made up with the earlier payment of the retro payments.
***How do I elect my severance payout option?
The first step requires that the employer provide you by June 12, 2013 information regarding the number of week's pay you have accumulated up to March 12, 2013 (s. 22.04 of the new collective agreement).
  
You will then have until September 12, 2013 to make an election. You will no doubt be provided with a form from the employer.  You will have the following choices:

  • Immediately cash out the voluntary severance you have accumulated as a single payment at the rate of pay of your substantive position as of March 12, 2013, or
  • Keep your accumulated voluntary severance and have it paid out when you resign or retire from the public service as a single payment at the rate of pay of your substantive position as of the date or termination of your employment from the public service, or
  • Immediately cash out part of the accumulated severance and keep the rest of it to be paid when you resign or retire from the public service.
For more information regarding the severance pay options, please consult the collective agreement.  Note that compensation advisors will play a key role in the implementation of these provisions.  They will be your main point of contact for questions relating to severance payouts.  It is AJC´s expectation that compensation advisors will use an “automated severance pay calculator” to generate personalized forms for most employees containing the essential information you require to validate the calculations and make an informed decision.

***Should I cash out now or wait until I resign or retire from the public sector?
If you take the voluntary severance cash out, each week of severance pay will be calculated on the rate of pay of your substantive position in effect as of March 12, 2013. If you cash it out when you resign or retire from the public sector, it will be paid at your exit rate of pay.  The AJC does not provide fiscal advice and nothing in this document should be perceived as legal or fiscal advice binding on the AJC.  We recommend that you discuss any legal, fiscal or financial impact with an accountant or tax advisor, or your compensation advisor.  Considerations should be given to the following factors in making your decision:

  • The 12% increase effective on May 10, 2013 does not apply to an immediate cash out;
  • Other increases on your rate of pay you may expect before you exit the public sector;
  • The possibility to roll-over into a RRSP any portion of a severance pay at retirement (for more details consult the Compensation Directive 2006-002);
  • The possibility to roll-over into a RRSP any portion of an immediate cash out (the CD 2006-002 does not apply to an immediate cash out although you should read the answer to the next question);
  • Consider any room you may have for unused RRSP;
  • The tax bracket your immediate cash out will be taxed on compare to a cash out at retirement;
  • A severance pay (whether cashed out immediately or at retirement) is a special remuneration which is taxable but not accounted for in your five consecutive years of highest-paid service for pension purposes (for more information see: Service and average salary for purposes of the pension plan).

***Is income tax the only deduction from the severance cash out payment?
The severance cash out payment is not subject to PSSA pension contributions. EI and CP/QPP may be deducted from the severance payment, if you have not yet reached your maximum annual contribution limit at the time the payment is made.
***How do I roll-over an immediate cash out into RRSP?
Following AJC´s inquiries, we understand that Treasury Board is currently in discussions with the Canada Revenue Agency with a view to arranging a blanket tax waiver with the CRA for LAs who would like to roll over $10,000 or less into their RRSP (you need to have unused RRSP room for that amount).   If successful, the AJC expects the following to occur:

  • The employer will provide LAs with a copy of this waiver to complete and return to the employer if they wish to proceed with this roll-over;
  • For employees wanting to roll over more than $10,000 into an RRSP, employees are likely required to contact the Canada Revenue Agency (and Revenu Québec if applicable) and request a tax waiver.
  • The following are the federal and provincial income tax forms you need to complete to request a reduction in tax deductions:
  • T-1213 - Federal: request to reduce tax deductions
    TP-1016 -Provincial (Québec)
  • After completion of the form, you should receive confirmation from CRA/Revenu Québec that you should attach to the personalized form your compensation advisor provides you.
Please note that the above information does not constitute tax, financial or legal advice.  Persons seeking such advice should consult a tax, financial or legal advisor.  

***Do I still get severance if I am laid off?
Yes. Severance for involuntary departure, including lay-off, continues to accumulate under the new agreement but any weeks of severance you have cashed out will be subtracted from the total number of weeks of severance you are entitled to.  
***Will taxes be deducted if I use my severance cash out to buy-back service for my pension?
To avoid or reduce tax deduction at source, an employee who wants to use this option should complete and submit to CRA a tax waiver form (Form T1213).  For more information regarding your eligibility to buy-back service, please contact your pension advisor.
***What are the tax implications of the cash out?
We understand that there are three ways of reducing tax deductions on the payments. For the immediate cash out, the only option for reducing tax at source is for individual employees to use personal unused RRSP room.

For the deferred cash out at retirement, members can benefit from a special RRSP contribution on retirement allowances of $2000 for each year of employment up to and including the year 1995. Note that there is an additional retiring allowance for each year of employment up to 1989 but this may be offset by your participation in the Public Service Superannuation Plan during this period. Both of these special provisions can only be used upon termination and cannot be used for the immediate cash pay-out. Members should consult the latest Canada Revenue Agency Income Tax Interpretation Bulletin on severance pay (Retiring Allowances) for complete details.

The third way of reducing the tax payable on the deferred option is to retire/resign late in a year (it usually takes a few weeks if not a couple of months before you actually receive your severance pay) or early in a year if you expect the rest of your income to go down that year.

***I have a question that is not covered above, who do I contact?
For questions relating to your years of continued service and severance payout calculations, please contact your compensation advisor.

For questions relating to your pension and the buy back of service, please contact a pension advisor.

For questions regarding the tax implications, please contact your tax advisor.

If after reading the enclosed, the collective agreement and the FAQ, you still have questions regarding the application of the new collective agreement; feel free to contact the AJC at admin@ajc-ajj.ca .  Please be sure to mark “collective agreement” in your subject heading.  A member of our labour relations staff will contact you as soon as possible.

****Will there be an "automated severance pay calculator" available for employees to help them choose the best option concerning the severance pay?
No. Such a tool is only accessible from the PWGSC website for compensation advisors. However, you will receive a form containing the information you need to make an informed decision (see the following question).
****Will the form set out years of continuous employment, pay as of the second day of the contract, and estimate of gross severance pay?
Yes, you can access a sample of the form by clicking here (see page 1).
****Will LAs receive a copy of the tax waiver form to complete and return to the employer if they wish to roll over $10,000 or less severance pay into their RRSP?
Yes, the departments and agencies will be developing and providing each eligible LA with an information kit which will include the relevant information on tax waivers. The information kit will be similar to this one (refer to pages 3-6).
****Can employees, who are on leave without pay, where they may be in receipt of EI benefits, defer their choice of payout option within 3 months after the end of their leave without pay period or 3 months after their EI benefits cease, whichever comes first?
According to a bulletin issued by TBS, the payment in lieu of Severance may have a potential impact on Employment Insurance (EI) benefits (and the Quebec Parental Insurance plan (QPIP) benefits) and as such, employees may choose to defer their option selection.

In such cases, the option selection will have to be made within three months of the end of the leave without pay period, the end of the EI benefits (and the QPIP benefits), or the return to work, whichever comes first.

Employees wishing to defer their option selection must provide their compensation advisor with proof that they are in receipt of EI Benefits (or the QPIP benefits) and confirm their return to work date.

The option to defer must be confirmed with the compensation advisor no later than September 12, 2013.


****What rate of pay applies in the calculation of my lump sum pay performance award for the 2012-2013 review period where an LA1, LA2A, or 2B is at the top of his or her scale?
Contrary to past practice where the applicable rate was the March 31 rate, the May 10, 2013 rate following conversion to the lockstep system shall now apply.
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