Underpaid, overpaid and un-paid. To many of the almost 430,000 Canadians in the public service, those words tell the tale of their past year – the year in which the federal government rolled out a new system for paying their employees that has become known as the “Phoenix fiasco.”
Public servants have rallied. Opposition MPs have criticized. The minister in charge has had little good news to report.
The Phoenix system, designed by IBM and rolled out in February 2016, has been encountering issues at least since its launch. And those problems have been getting progressively worse.
Instead of streamlining the payment process, Phoenix seems to have thrown the entire system into disarray.
WATCH: Phoenix payroll problems for federal public servants deepen
With the one-year anniversary of the Phoenix rollout around the corner, the government revealed it paid out roughly $140 million more in salaries in 2016 than it should have.
The deputy minister at Public Services and Procurement said this week she doesn’t expect to see the scenario play out again once the system “reaches a steady state” in the categories creating most of the problems, such as leaving the job or being on leave without pay.
Union representatives, however, have said some members had full paycheques clawed back – or in some cases three paycheques – as a consequence of being paid too much.
The focus so far, Public Services and Procurement Minister Judy Foote said, has been ensuring employees are paid enough – only after that is resolved, will the department move its attention to the cases of overpaid employees.
Until then, many of those who continue to receive inflated paycheques are expecting a difficult time during this tax season. The minister’s advice offered earlier this month was to put the extra money in a separate bank account.
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She also ensured the government will recover all funds and that it will do so “in a way that is respectful.”
In the meantime, the cost of fixing the problems with Phoenix is soaring; in September, the deputy minister pegged the cost at $50 million.
Since launching its new electronic pay system, more than 82,000 government workers have complained of being underpaid, overpaid or not paid at all.
That backlog has since been pared down to less than 7,000 files, although dealing with that has significantly slowed processing any payroll changes filed over the last few months.
How’d we get here?
If you ask the public service unions where things went wrong with Phoenix, the consolidated payroll system for federal public servants, they’ll tell you things started going south before the system was even off the ground.
In 2010, Ottawa announced its intention to consolidate payroll services in Miramichi, N.B. and launch an electronic pay system to replace the existing, 40-year-old system.
In total, moving from the old system to the new one was expected to cost taxpayers $186.6 million. But one document from late 2013 predicted the government would save around $78 million per year once the “efficiencies” were in place.
When Phoenix launched, a few months behind schedule, in February 2016, public servants almost immediately started flagging problems. Officials said they were isolated glitches that would be handled.
A couple of months later, and it was evident the system was in a full-fledged flame out.
Tens of thousands of people were finding that their overtime pay and medical benefits weren’t being paid out on time, and for approximately 720 public servants, the money dried up completely.
Mortgage payments and student loans went unpaid as a result, and the unions representing federal public servants stepped in, deciding it was time to take Ottawa to court to get things moving again.
One union representative called Phoenix a “boondoggle.” Public Services and Procurement Deputy Minister Marie Lemay called the situation “completely unacceptable,” and a second payroll centre was opened in Gatineau, Que., to deal with the backlog.
“It is hard to find positives associated with Phoenix, especially when employees continue to face pay issues. While the pace has been slow, we have seen some improvement,” deputy minister Marie Lemay said at a January briefing on the issue.
“Public servants deserve much better and that’s why we are making prompt processing the key moving forward.”
With the end of the backlog in sight, however, she said the department will be shifting some of its resources in an effort to bring down wait times and clear late payments, particularly with parental and disability leave requests.