Response from Indigenous and Northern Affairs Canada

From Public Services and Procurement Canada

Mr. Michael Wernick
Clerk of the Privy Council and Secretary to the Cabinet
Privy Council Office
80 Wellington Street, suite 332
Ottawa ON K1A 0A3

Dear Mr. Wernick:

In response to your letter of November 2, 2017, the following is an update on the actions taken by Indigenous and Northern Affairs Canada (INAC) to stabilize the pay system and ensure our employees are paid accurately and on time. We apologize for the delay in responding to your letter.

INAC has been supporting Public Services and Procurement Canada (PSPC) since the implementation of Phoenix, in February 2016, and through the Onboarding to My GCHR in May 2016. 

INAC devolved its compensation activities to the PSPC Pay Center in Miramichi in 2012-2013, thereby disbanding its trained compensation advisors and relinquishing processing of pay transactions. In 2013, a Compensation Analysis and Liaison Officer position was created to look into pay matters with the Pay Center and to ensure cases receive the proper follow-up; actions taken included the creation of an internal log that allowed INAC to track of resolutions of employees’ pay issues.  We also held weekly calls with the Pay Centre.  

In September 2015, an additional compensation officer position was created due to the volume of unresolved cases with the Pay Centre prior to the implementation of Phoenix. On February 24, 2016, date of the implementation of Phoenix, INAC had over 4,700 pending transactions to be processed by the Pay Centre.

Over the summer of 2016, 5 new resources were added to the team due to the continually growing number of unresolved cases with the Pay Centre.  INAC implemented a Departmental Phoenix Response Team (PRT) comprised of functional specialists from Human Resources Systems (2), Compensation (7) and Finance (5). This cross-functional team actively provides support to INAC employees to resolve individual pay issues in addition to handling the administrative burden resulting from inaccurate pay. 

Due to the restricted access in Phoenix, our compensation liaison officers were and continue to be limited in their role, to educating and explaining to employees the nature of their pay issues and providing information on their pay stub, T4s, overpayment, implementation of their collective agreement, retroactive salary payment for the purpose of facilitating their communication with the Pay Centre. It should be noted that there is a significant emotional support provided by this team that should not be underestimated.

While PSPC is regularly implementing fixes to the system, the number of changes and their impacts on individual cases are further complicating pay issues and creating new challenges with unintended consequences. Currently the team is overwhelmed and beginning to feel the strain of undertaking this volume and intensity of work with little relief. We anticipate that more resources will be required to address the continuous increase of issues affecting employees. As of November 2017, INAC has more than 10,000 outstanding transactions over 30 days to be processed by the Pay Centre.

In an effort to support managers and employees, communication is regular and ongoing with the development of targeted web content related to Phoenix and My GCHR content on INAC’s intranet page.  We established a mechanism of recurring emails to both employees and section 34 managers as a reminder of their obligations. Self-service training developed by PSPC for employees and managers was made available and promoted. However, INAC created its own training to account for the deficiencies observed in the afore-mentioned training, and to have a more robust and tailored approach to meet the Department’s needs.   

To increase capacity at the Pay Centre, INAC provided the services of two compensation advisors to the satellite office. To increase proficiency with the Pay System and acquire additional access to Phoenix, two compensation advisors participated in the 12-week Phoenix boot camp. This allows compensation advisors in the Department to carry out a limited number of transactions in the Phoenix system such as new hires, benefit enrollment, transfers out and resolve certain types of issues directly in the pay system.

INAC has been active in its participation on various interdepartmental working groups and committees with PSPC and Treasury Board Secretariat (TBS) in an effort to identify root causes and coordinate resolution with the Pay Centre when possible.

Since January 2016, 645 INAC employees received salary advances in the amount of $1.9 million. Recovery and partial recovery of this amount has occurred in 302 cases for an amount of approximately $711,000.  As of September 2017, INAC in collaboration with PSPC, entered into a pilot project on the issuance and recovery of salary advances to employees.

This initiative allows INAC to provide salary advances to employees on a timely basis and in addition, recover the advance directly from the employee in a supportive and collaborative manner. This arrangement allows options for repayment adapted to the financial circumstance of the employee, prevents future deductions from the employee’s regular pay and in addition, alleviates workload for the Public Service Pay Centre. Since September 2017, 23 employees have repaid the Department directly for a total of $56,000.

INAC coordinates and processes Out-of-Pocket Claims which are expenses employees have incurred due to incomplete or inaccurate pay resulting from the implementation of the Phoenix pay system. Through the Canada Wide Claims process, a total of 44 claims were received amounting to approximately $42,000. Of those, 30 claims have been processed resulting in approximately $10,000 reimbursed to employees.

In collaboration with PSPC, we have undertaken a pilot project to facilitate resolution of compensation issues such as processing of terminations, leave without pay and return from leave. Since October 2017, INAC has been processing specific transactions such as new hires and transfers out, and we have engaged dedicated resources at the Pay Centre to assist with the timely processing of isolated post allowances to prevent underpayments of these amounts. Through these proactive measures, we expect a decrease in the number of new pay issues. Progress on these pilot projects are being monitored by both PSPC and INAC.  

The implementation of many of the activities mentioned above required financial investments by the Department. For the fiscal year 2017-18, incremental expenses required to deal with the shortfalls of the Phoenix Pay System stand in excess of $1.3 million. The eventual transformation of the Department will also represent additional risk, workload and expense.  It is anticipated that further investments will be required as a result, and on an ongoing basis until the pay situation is stabilized.

With the recent announcement of the creation of Indigenous Services and Crown-Indigenous Relations and Northern Affairs, we have already engaged PSPC, TBS and Bargaining Agents to ensure a smooth transformation with minimal disruption to employees’ pay.

INAC will continue to collaborate fully with PSPC as well as Treasury Board to identify opportunities for improvement and innovative ways to meet the ongoing challenges posed by the pay system.

Thank you for your ongoing support with this challenging and persisting situation.

Yours sincerely,

Hélène Laurendeau

Jean-François Tremblay

c.c.: Minister Dr. Carolyn Bennett
Crown-Indigenous Relations and Northern Affairs

Minister Dr. Jane Philpott
Indigenous Services

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