Response from Canadian Heritage

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 K1. 0A3

Dear Mr. Wernick:

In response to your letter dated November 2, 2017, I am writing to inform you of the actions that Canadian Heritage (PCH) has taken regarding the current pay system challenges.

To give you a sense of the state of play here at PCH, we have a population of 2000 employees. Approximately 1,400 former or current PCH employees have a total of 3,065 cases pending with the Pay Centre for more than 30 days (as of October 2017). With almost two thirds of our employees affected, pay-related issues continue to have a negative impact on our morale and detracts from overall productivity.

Canadian Heritage preparedness

Prior to Phoenix being rolled out, PCH had prepared a contingency plan, including ordering a large number of cheques so as to be able to issue payments to employees in cases where they were not paid on time. In fact, we were among the first departments to offer emergency salary advances and priority payments to any employees affected, or who faced financial hardship, because of issues arising from Phoenix. Our service standard has been to provide employees with an urgent payment within 48 hours of their contacting us. The goal is to minimize any pay disruption and to ensure that our employees are paid in a timely manner.

  • To date, PCH has provided 431 salary advances for 232 employees, for a total amount of $ 661,000
  • On an average, since April 2017, PCH has provided 10 emergency salary advances or priority payments per pay period

From the first Phoenix pay, we manually verify payroll reports and proactively contact employees with no or low pay to advise them of the potential problem and to offer a salary advance. While this review process has caught many issues proactively, it is not perfect. Complicating matters, what we observed early on is that not all employees were approaching management and flagging that they had been underpaid or not paid at all. The motivation for staying quiet varied. In some cases, employees thought they could get by in the short-term; others did not want their managers to be aware of their challenging financial situations; and others feared that coming forward for a salary advance or priority payment would further complicate their file in the Phoenix system. We had to communicate repeatedly to employees that the department was there to help and that it was unacceptable that they were not being paid accurately and/or on time. In short, this was our problem as an employer, not their problem as an employee. To bring home this point, we learned that we had to use various communications methods, from managers walking the floors to check in with their staff to department-wide town halls. Online communications were simply not enough.

Our experience has been that overpayments create as much stress for employees as underpayments – in some cases, it has affected their access to affordable child care or they have lost child benefits as a result. Similar to our review process for underpayments, we have implemented a risk-based internal controls approach to detect and stop overpayments when the evidence warrants it. Two employees work almost full‑time on providing this service, including tracking and monitoring.

Resolving the backlog: compensation liaison team

In order to support the Pay Centre in resolving the backlog and to provide better service to our employees, we established a compensation liaison team within our Human Resources and Workplace Management Branch, even though funding for this kind of activity was transferred to the Pay Centre in 2013-14. The team currently has four members, three of whom are now fully trained to perform pay transactions. The objective is that this team, in collaboration with our Financial Management Branch and our Values and Ethics Office, takes an “HR-to-Pay” approach and helps reduce the number of active cases in the backlog, while also providing other forms of support (or example, counselling) when requested.

  • To date, we have seen more than 515 employees have their cases resolved because of interventions made by our staff in providing advice and guidance or by completely handling their cases on behalf of the Pay Centre

While the ultimate authority for pay transactions remains with Public Services and Procurement Canada (PSPC), we developed our own internal Procedures Guide for Pay Services to reduce new pay disruptions by assisting employees, managers, human resources agents, and other concerned departmental communities in following the necessary guidelines for each pay action. The Guide has been updated over time to reflect business processes aligned with the implementation of Phoenix and the role and responsibilities of the Pay Centre.

In February 2017, PSPC announced that departments would be able to assume responsibility for entering data into Phoenix to help expedite three type of transactions: 1) complete data entry for cases of leave without pay – greater than five working days; 2) complete data entry for cases of return from leave without pay – greater than five working days; and 3) termination of employment. Since April 2017, PCH has processed more than 160 of these transactions, enabling us to avoid additional pay disruptions.   

As this delegation of responsibility has proven effective and has a direct impact on potential pay issues, we would like PSPC to consider delegating further partial or complete transactions to departments while they are working on the stabilization of the pay system. The transfer of employees between departments has proven to be one major issue on which departments could certainly partially handle on behalf of PSPC. At PCH, we have more than 80 employees who are waiting for their pay files to be transferred. In some cases, we have been waiting for the transfer for more than a year. The result of these delays is a domino effect on human resource transactions such as leave requests, overtime and other pending staffing actions, ultimately creating more pay issues for the Pay Centre. Furthermore, this generates additional pressure and stress for employees and managers who lack the necessary information to ensure sound day-to-day management.

We have also found that the Phoenix interface causes errors to manifest in our Peoplesoft human resources management system. As a result, PCH currently has three PeopleSoft Business Analysts working 80 percent of their time to correct integration errors. Moving ahead, we predict we may need to increase the number of resources dedicated to correcting these errors in order to be able to maintain overall HR data integrity.

Lastly PCH is undertaking an internal audit of our Control Environment, focusing on all PCH processes and systems that enable an accurate and timely processing of employee compensation through the Phoenix Pay System.

Student hiring

In summer 2017, in support of the collective pledge to improve how we recruit, onboard and develop students, PCH put in place a dedicated team responsible for our student workforce, notably two dedicated experienced HR Advisors who acted as Sherpas to students, guiding them to resources and information and answering their questions at any point during their work experience. Hiring managers were provided with information to ensure they understood the importance of getting hiring paperwork done in a timely manner to avoid students not getting paid. They also received a guide to help them with all aspects of orientation and onboarding, which complemented an orientation guide provided directly to our students (which included pay and contact information). Students were informed by their managers that they were entitled to an emergency salary advance, and the Sherpas reiterated this point when they met with each student individually shortly after they joined the organization. We surveyed the students early in their work term and again at the end to check whether they were given meaningful work, whether their manager was properly prepared for their arrival, and whether they had pay issues and how these were resolved.

  • This year, PCH hired more than 160 students. Twenty students reported pay issues, with most being resolved within a short timeframe, in collaboration with the Student Compensation Services at the Pay Centre.

As student hiring remains a priority, our compensation liaison unit is paying close attention to these files by taking appropriate steps such as ensuring work schedules are entered into Phoenix and the appropriate rate of pay is provided. This proactive work has resulted in our students being mostly paid accurately and on time, despite variable work schedules.

Departmental Claims Office

PCH established its Departmental Claims Office on September 30. 2016.

  • Thirteen employees have approached the office for advice, resulting in nine claims. Six of these claims were within departmental authority and three exceeded departmental authority and were forwarded to Treasury Board Secretariat

As was the case initially with emergency salary advances, we worry that the number of employees who have made claims understates the actual problem. Given that approximately 1400 employees have been affected by pay-related issues, 13 is a low number. We are now undertaking additional outreach and communications to remind staff that this support is available to them should they need it.

Communicating with employees and managers

PCH continues to publish all key messages prepared by PSPC and/or OCHRO so employees are kept informed of news regarding the Pay Centre and Phoenix. Moreover, Guylaine and I publish quarterly updates on pay, outlining the measures taken and the resources available internally in order to help employees with the pay system. We have also stressed to our management team the importance of reaching out to employees personally to make sure they are surfacing any pay issues that they are experiencing. Discussions also occur during our various union-management consultation committees to ensure that our union representatives are aware of the issues our employees are facing and the measures put in place by the department to help. This two-way communication with bargaining agents has proven to be effective, as PCH has received only two grievances on Phoenix-related issues. Corporately, PCH representatives actively participate in the various conference calls with PSPC and the Pay Centre. We actively voice our concerns and challenge the resolution process in order to improve the system.

Annually, employees are reminded about the importance of ensuring that their home and mailing addresses are up to date in our HR system as this has a direct impact on various factors related to income tax. As a good practice, managers are also reminded frequently to incorporate into their routine the approval of pending transactions in Phoenix. At a certain point, given our high volume of pending transactions with section 34 managers, we reached out to managers individually to make sure that the pending transactions were processed. Personally reaching out to managers also gave them a chance to speak with compensation specialists who could provide individualized and in-person advice.

We have continuously adjusted our communications approach, given what we have learned about employee reticence to come forward. Guylaine and I continue to have employees write us personally when they feel that they have exhausted all possible avenues of recourse with the Pay Centre. We recently personally called the ten PCH employees with the most difficult and longstanding situations, to apologize for their troubles, to get an assessment of how they are being treated, and to ask what more we could do to help. We have now asked our ADMs to do the same with the next 50 or so most difficult cases. We also plan to more comprehensively measure satisfaction with departmental support in our next quarterly upward feedback survey, which will be distributed next week.

Feedback from these calls has, so far, indicated a high level of satisfaction with the support being provided by the Canadian Heritage team. That said, the employees we spoke to are resigned to the fact that it will likely take a long time before their cases are resolved by the Pay Centre and they have a low level of confidence in the system. One of the most consistent pieces of feedback is that the system is not “people-focused,” but rather “case-focused.” Employees are having multiple interactions on various issues they are facing, as opposed to having their file addressed in a holistic way. 

We continue to work with PSPC to address our most complex cases and our most impacted employees. Beyond this, we have also provided periodic reports to PSPC on the types of recurring problems that we observe in the department, with supporting data from our tracking and HR systems. Although labour-intensive, the objective is to give PSPC officials a window into other sources of data so they can compare with internal reporting and so they can better design system-wide solutions.

Moving forward

PCH will continue to closely monitor how we can support our employees and the Pay Centre. For example, to assist with the implementation of collective agreements, we plan to offer information sessions on how to estimate the amount of retroactive payments owed. PCH is also looking at ways to avail ourselves of the new “Staffing Analyst” role developed by PSPC – for example, by enabling our HR users to take ownership of their data in the HR and Phoenix System to ensure data integrity. As the HR-to-Pay Stabilization Training becomes available online, our compensation and learning teams will work on a roll out plan for this new mandatory training. Moreover, to respond to the TBS request to provide resources to assist in the delivery/facilitation of the HR component training sessions, PCH will be lending one Business Analyst.

We will continue working in close collaboration with the Pay Centre and all the other involved stakeholders towards the resolution of pay issues.

Sincerely yours,

Graham Flack
Deputy Minister

Guylaine F. Roy
Associate Deputy Minister

c.c.: The Honourable Mélanie Joly – Minister of Canadian Heritage

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