The Phoenix payroll system has cost the federal government over $3.5 billion and the resulting payment issues have led to the government entering into a number of agreements to pay affected employees.
In a Feb. 6 release, PSAC noted that over the last quarter alone, while 24,970 backlog cases were resolved, 17,345 new cases were added, leading to a net backlog reduction of 7,625 cases.
Over half of the federal government’s 290,000 employees have experienced pay problems due to the system, which is expected to lead to total unplanned expenditures of over $2.2 billion until it is replaced.
“With over 383,000 pay transactions waiting to be processed, workers are done with excuses. They need real solutions,” PSAC said in a release. Of the pending transactions, 52 per cent are over a year old and 22 per cent are outside service standard.
According to the release, PSAC national president Sharon DeSousa had demanded that the government take swifter action on this issue in correspondence with the minister of public services and president of the Treasury Board.
“She has also put them on notice that PSAC will not rule out taking this fight to the Federal Court if inadequate progress continues to be made,” the union added.
In November 2024, the federal government settled a class action brought by casual and non-unionized federal employees impacted by the pay system.
Under the agreement, impacted class members are set to receive a maximum amount of $350 for 2016/17 fiscal year and a maximum of $175 for each of the next three fiscal years.
The government is currently working on replacing the Phoenix system with a new system expected to launch in 2026-27 after a configuration and testing period.
If you have any information, story ideas, or news tips for Law360 Canada on business-related law and litigation, including class actions, please contact Karunjit Singh at karunjit.singh@lexisnexis.ca or 905-415-5859.