AJC Files Grievance for Unreasonable Delay on Recovery of Overpayments
Friday, May 27, 2022
The Phoenix Damages agreement compensated AJC members for financial and non-financial damages due to issues with pay caused by the Phoenix pay system however, that agreement did not address overpayment recoveries.
Additionally, that agreement covered only four fiscal years between April 1, 2016, and March 31, 2020. For the last two years, no agreement has been in place to address damages suffered by public servants as a result of Phoenix pay issues, including our members, even though pay issues persist to this day.
To address this gap, the AJC filed another policy grievance on March 3, 2021 in relation to various pay issues arising from Phoenix to address any and all breaches preceding the filing of the grievance and dating back to April 1, 2020, as well as any and all breaches going forward. But again, that policy grievance does not specifically address the recovery of overpayments.
In October 2021 the federal government began reviewing pay files to identify members who may have received overpayments in 2016 and 2017 that were approaching the six-year limitation for recovery and did not have a payment plan in place. The AJC has serious concerns with this new recovery plan effort because it significantly changed the way bargaining agents negotiated how overpayments would be recovered. Typically, an employee’s whole pay file needs to be reconciled before any recovery takes place to ensure the amount owed is correct.
Moreover, affected members received a letter from the Pay Centre asking them to acknowledge in writing that they were overpaid by Phoenix and to select an option for repayment. Members were given four weeks to respond. Otherwise, the Pay Centre would begin the overpayment recovery immediately without the benefit of a flexible payment plan. The Employer used this tactic of seeking acknowledgments of amounts owing in order to get around the six-year limitation period, and directed AJC members to acknowledge debts without the benefit of comprehensible, accurate and timely pay information, and without advising them that the limitation for collection of those debts had expired.
As such, the AJC grieves that the employer has acted unreasonably, unfairly and in bad faith, and continues to do so in contravention of the AJC Collective Agreement, including article 5 (Management Rights):
• In failing to pay AJC members accurately and on time, and in failing to provide them with accurate, timely and comprehensible information about their pay;
• In delaying up to six years before attempting to identify overpayments and addressing them by notifying affected AJC members in order to preserve their timelines, and in doing so depriving our members of the ability to take advantage of statutory tax benefits (gross v. net);
• In recovering or attempting to recover alleged overpayments up to six years after they arose or beyond the statutory limitation period and in exerting pressure on AJC members to acknowledge such amounts at the risk of automatic recovery without the benefit of flexible payment options;
• In recovering overpayments without properly reconciling a member’s entire pay file to ensure that any amounts owing are correct, or providing members with clear and accurate documentation to substantiate overpayment amounts; and
• In recovering overpayments without offsetting them against any amounts owed to the member.
We will keep you informed of the developments in this grievance process in coming months.