OTTAWA — The longstanding issues surrounding the Phoenix pay system have culminated in a significant development: the federal government has reached a settlement in a class-action lawsuit aimed at compensatory measures for casual and non-union employees adversely affected by the problematic payroll software.
This settlement stems from the challenges employees faced when the Phoenix system was introduced back in 2016, originally intended to modernize the federal payroll. Unfortunately, the implementation of this system rapidly turned sour, leading to widespread discrepancies, missed paychecks, and other significant mess-ups for employees across the public sector. The fallout from the issues triggered by Phoenix became so acute and persistent, it has, as of this past July, reportedly cost the federal government approximately $3.5 billion.
Law firm Saraïlis Avocats, which represented the plaintiffs, emphasized the hardship caused by the payroll troubles, noting the emotional and financial turmoil experienced by those affected since the system's inception. Christian Saraïlis, who leads the firm, stated, "The negotiations have resulted in a fair and equitable settlement for class members to compensate for the moral damages they endured. This is, in our view, a compelling example of justice achieved."
The proposed settlement awaits approval from the Quebec Superior Court and is slated for hearing on February 18. If the court grants approval, affected individuals, including casual employees, student staff, and term or part-time workers, will be eligible for compensation. Damages are expected to reach up to $850 for the specified years of employment between February 2016 and March 2020.
Under the settlement terms, employees will be able to submit claims online or via mail once approved. Compensation will be tiered: for the fiscal 2016-2017 year, class members can expect up to $350, and for the years 2017-2020, payments will max out at $175. Notably, casual and part-time workers who have already received compensation for Phoenix-related issues are disqualified from this agreement. They can also opt out if they wish.
The lawsuit was initially authorized by Quebec judge André Prévost back in April 2018, focusing on non-unionized employees, which the majority of public servants are not represented by unions directly. The legal action sought to address compensation for those who were improperly paid or not compensated for their work, including students, retirees, and occasional workers.
Historically, unionized federal employees had previously reached settlements to address similar issues stemming from the Phoenix system, receiving lump-sum payments to cover back pay discrepancies. Union representatives had pushed for additional compensation for emotional distress, citing the significant toll the pay issues had on many employees.
The Phoenix pay system's failure forced thousands of federal employees to grapple with stressful situations due to irregular income. Not only were some employees overpaid and later required to repay the government, but others faced delayed payments or even had not received their salary at all. These issues have been exacerbated by the complexity of federal payroll processes, making it particularly difficult for the government to rectify the backlog of incorrect payments.
Despite these efforts, the issue isn't fully resolved. Current projections hold the government accountable for continuing to work through the mounting backlog of pay discrepancies until March 2025. The Treasury Board of Canada stated its commitment to ensuring all employees are properly compensated, affirming their responsibility to rectify payroll challenges as they arise.
This class-action settlement marks a pivotal moment for the non-unionized and casual public servants still coping with the ramifications of the Phoenix fiasco. Advocates for affected employees have praised the out-of-court settlement as a necessary step toward rectifying past wrongs, even as relief for many will come only after due process through court approval. "This is about making things right for the employees and their families who have suffered long enough," noted Christopher Sarailis, the managing attorney for the plaintiffs.
It is worth noting, though, even amid this positive step, many still feel the sting of the prolonged payroll issues. The emotional impact of the Phoenix pay debacle has lingered, with many employees reflecting on how their financial lives were disrupted due to inadequate compensation practices and processes.
Moving forward, workers stand poised to reclaim some semblance of normalcy through compensation, bringing to light the importance and necessity of accountability amid governmental oversight and the federal workforce's conditions.
