The largest federal union says it is willing to negotiate simpler pay rules to help reduce the workload for Phoenix and the system replacing it, but changes could increase the salary bill.

Chris Aylward, president of the Public Service Alliance of Canada (PSAC), said the union is open to discussions at the upcoming round of bargaining to simplify collective agreements and pare down the rules “as long as it doesn’t mean any concessions” for employees.

“We are absolutely interested in simplifying collective agreements,” said Alyward.

“I don’t know how it can be done so it is pure, 100 per cent cost neutral, and the only way we would talk about it is if it doesn’t mean concessions for our members.”

Treasury Board made the “simplification of pay administration” one of its priorities when its negotiators exchanged demands several months ago.

Last week, Treasury Board President Scott Brison said he advised unions that the government wants to simplify the 85 collective agreements with employees to reduce the number of transactions, whether for Phoenix or its replacement.

Many argue the complexity of federal pay is a root cause of the calamities that have dogged Phoenix.

Technology experts have argued that the number of rules should have been reduced and simplified before the government ever started work on Phoenix, and those rules remain a significant challenge for a new system.

“They will continue to have problems if they don’t deal with this fundamental issue,” said one IT expert. “The payroll process is too complex and they have a decentralized human resources system.”

At the industry day the government held last week to gather feedback on the new system it wants to develop, vendors asked whether pay rules will be reduced. Treasury Board officials said there was work underway to “classify and categorize pay rules.”

Privy Council Clerk Michael Wernick, Canada’s top bureaucrat, has previously signalled that a major cull of pay rules, special allowances, and 630 job classifications were needed before a new pay system is built.

It’s unclear how open the government is to streamlining rules and processes that have accumulated over 60 years of collective bargaining. Some argue it would take years to get a comprehensive view of the 80,000 pay rules embedded in contracts.

Aylward said PSAC was willing to explore rolling allowances into base salaries.

The government has a pile of allowances, which employees receive on top of their base salaries. They include retention allowances; extra pay for employees whose skills are in short supply; and allowances for meals, vehicles, travel, and clothing, such as uniforms, safety boots, and glasses.

Aylward said PSAC would be willing to negotiate the values of these allowances into base salaries. He said the union would also be willing to adjust acting pay so those filling in jobs are paid the higher rates from Day 1, rather than waiting for a few days before qualifying for the extra pay.

Acting pay is a big problem for Phoenix and has accounted for a large number of cases sitting in the queue. The government has many acting-position transactions compared to other employers. These are used to fill in when people are on leave; to try people out in a job; or to bridge gaps while they positions are filled, which takes months in the public service.

Aylward said PSAC would also be willing to change the bilingual bonus so it kicks in from the first day someone is hired, rather than the current rule of waiting five days.

The cost of customizing Phoenix to handle this quirky rule for the bilingual bonus proved highly controversial and expensive. Phoenix managers wouldn’t change the rules; instead, the software had to be rewritten.

The government also has a report on bilingualism in the public service that proposes scrapping the $800 bilingualism bonus and redirecting the money into a language training fund that would be managed with federal unions. Unions have given that proposal a frosty reception so far.

The bilingual bonus has often been used as an illustration of the government’s complex rules and practices, which required the off-the-shelf software on which Phoenix was built to be customized to handle. IBM testified during Phoenix hearings that the government made more than 1,500 change requests that required the rewriting of code.

Phoenix is built on off-the-shelf software, PeopleSoft 9.1, and IBM was hired to install it for federal payroll, which is the most complex in Canada.

The large number of customizations contributed to many of the problems that have dogged Phoenix. New collective agreements, which means updating pay rules, can create what an industry official called “lots of side effects.”

Debi Daviau, president of the Professional Institute of the Public Service of Canada, has previously said the union was willing to discuss similar changes. She also suggested negotiating new contracts before they expire to reduce the number of retroactive pay transactions that are clogging the system.

Unions have previously argued that if the government is intent on reducing the number of rules, the easiest way is to pick the most “beneficial” provision and make it the standard for everyone. Take, for example, the nearly 40 different rules for overtime: pick the most generous of the overtime rules and apply it everyone.

That also would make it easier for unions to sell changes to their members.

Compensation is the government’s largest single cost. Some have argued that changing the rules, even if it increases the size of the salary bill, could end up being cheaper than pumping millions more into fixing Phoenix, or tailoring a new system to the morass of rules.

The government’s chief financial officer has estimated that Phoenix could cost $3.5 billion to fix over five years.

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