TBS Provides Instructions to Departments and Agencies on How to Implement the Severance Pay Provisions for LAs :: Association of Justice Counsel News
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April 10th, 2013
April 10th, 2013

TBS Provides Instructions to Departments and Agencies on How to Implement the Severance Pay Provisions for LAs

Treasury Board Secretariat (TBS) has now confirmed having provided instructions to heads of Human Resources and Chiefs of Labour Relations and Compensation on how to implement the severance pay provisions.  We can now answer the following questions with certainty, which questions have been incorporated into the AJC's existing FAQ:
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 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.

Next Steps...

We received reports that TBS has yet to issue directives to smaller departments and agencies regarding performance award and pay conversion requirements.  The AJC has expressed its concerns to TB regarding these communication delays and is reaching out to smaller agencies directly to ensure that they make a point of informing themselves of their retroactive pay and performance pay obligations to our members.  

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