The Trudeau government and federal unions have resumed talks about compensation to Canada’s public servants for the emotional and financial damage of more than two years of botched pay in a settlement that could include extra days off for all employees.

Debi Daviau, president of the Professional Institute of the Public Service of Canada, (PIPSC), has confirmed Treasury Board negotiators have the green light to wrap up discussions, stalled for months waiting for a mandate from the government to proceed.

“We are in the thick of it right now so I can’t report on progress, but I can tell you we are finishing talks because Treasury Board now has a mandate,” Daviau said. “I am hopeful we are nearing the end of this.”

Discussions have been quietly underway since last year to come with a framework on how to compensate the 300,000 public servants paid by the error-prone Phoenix for pain and suffering. The government’s offer will need the approval of Prime Minister Justin Trudeau and Finance Minister Bill Morneau.

The parties have been talking about a tiered approach, built around time off, cash and interest on money owed, tailored to the nature and extent of emotional and financial hardship faced.

More than half of all public servants have had some kind of botched pay. They have been over paid, under paid or not paid at all. Sorting out pay, compounded by the uncertainty of being paid properly, consumed large amounts of employee time at and off work. Neither the government nor the unions have revealed the amount of damages being discussed.

The recent report by the federal comptroller-general estimated Phoenix could take five years to fix and cost more than $3.5 billion. It said the “significant” costs of any unreported claims and the settling of outstanding lawsuits and grievances for damages would be on top of that. Public Services Minister Carla Qualtrough has insisted that Phoenix won’t take five years to fix.

The time to fix Phoenix will affect the size of a settlement because damages could continue to accumulate until the system is stabilized. That’s further complicated by the fact that Public Services and Procurement Canada still doesn’t have a firm handle on the extent of the problem.

The government has openly acknowledged the hardships public servants have faced as “unacceptable.” The February budget signalled its willingness to negotiate “to address the real mental and emotional stress and unacceptable financial impacts on public servants.”

Sources say the tiered approach is built on the recognition that all public servants paid by Phoenix are somehow affected. That means all employees could get some time off to compensate for the stress and the work created by not being able to count on getting paid properly. Those who have out-of-pocket costs would be reimbursed. Finally, there would be a case-by-case process to assess damages and interest for those most seriously affected.

Those familiar with the talks say there has been disagreement over how many days public servants should get for the disruptions of the Phoenix crisis, but the sticking point is the framework for those who faced significant emotional, health and financial problems.

Since Phoenix went off the rails, public servants have missed mortgage payments, been foreclosed upon, faced damaged ratings or mental stress or illness because of not getting paid properly.

What will be tricky to assess is damages for the opportunities public servants have lost because of foregone financial decisions or promotions and other job offers that were rebuffed in fear of creating a change that could botch their pay cheques.

The discussions come as the 17 federal unions and government gear up for the next round of collective bargaining. Neither government nor union leaders want damages to get tangled in contract talks, which would make bargaining more difficult and contentious.

It’s unclear whether the settlement will only cover employees represented by unions or will extend to the thousands of unrepresented employees, including 6,500 executives. Some non-unionized employees have joined a class action suit for damages.

The settlement is aimed at resolving the various measures public servants have taken against the government over Phoenix.

The unions have led the way on this, filing more than 40 policy grievances. The major grievances are over the government’s failure to implement collective agreements within the legal deadlines. Others have been filed over the government’s failure to properly process disability, maternity leave, or properly remit union dues.

Unions have also filed at least six complaints of unfair labour practices with the Federal Public Sector Labour Relations and Employment Board.

In addition the government faces thousands of individual grievances that have been filed since Phoenix went live in February 2016. The main complaints are faulty pay for acting positions, overtime, vacation and employees’ job level.

Unions expect more grievances once a damages settlement has been reached.

The government has also faced workplace injuries complaints because of Phoenix and are braced for an increase in mental health claims. The government’s disability claims for depression and anxiety are already among the highest in the country.

Unions have surveyed their members in the 2017 Public Service Employees Survey about Phoenix’s impact.

A survey by PSAC found 82 per cent of its members have been affected by Phoenix. Of those, 18 per cent reported great hardship; 76 per cent claimed mental health impacts and half made career choices — such as refusing transfers, promotions or acting positions — to avoid botched pay.

The Public Service Employee Survey (PSES) questioned workers about stress and found pay and compensation were the highest rated stressors.

The PSES survey also found public servants were spending hours or days of their own time trying to resolve Phoenix pay issues. Nearly half spent up to nine hours while 14 per cent lost more than 40 hours trying to fix their pay cheques.