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Gary Corbett, president of the Professional Institute of the Public Service of Canada, said he was pleased the unions could reach such an amicable compromise with the government, which has come down hard on the public service with changes to pensions and a planned overhaul of sick leave and disability.

“What matters to our members is that they are not going to be out of pocket and their total compensation isn’t going to change one iota. They are going to change the system without the pain of a four-per-cent reduction in pay,” said Mr. Corbett.

The government faced major blowback from unions after Public Works briefed them on plans to recover two weeks’ pay from all employees. The unions agreed in a meeting in Montreal last month that stopping the clawback was a top priority.

They complained to Treasury Board, demanded to see a business plan to support the change, and talked about launching a legal challenge if the government went ahead with the plan. They also questioned whether the government was exploiting the new system as a way to recover billions from payroll to help pay down the deficit.

Public Works had wanted to recover the pay as part of what it called the “transitional two-week waiting period” in moving to the new system. Now, public servants will receive their full pay and benefits during the transition but will not receive a paycheque two weeks after they leave the public service. Employees who join the public service after the new system is introduced will not receive a paycheque for up four weeks but will receive a final cheque up to two weeks after they leave or retire.

Under the original Public Works’ plan, employees would have received a full paycheque for the first payday in 2014, but the next 24 payments would have been reduced until the equivalent of two weeks’ pay was collected.