PSAC's Chris Aylward listens to Debi Daviau, president of PIPSC, during a news conference about the Phoenix pay system in October 2017. THE CANADIAN PRESS/Adrian Wyld

Canada’s federal unions are appealing to Prime Minister Justin Trudeau to rebuild the public service pay system and compensate employees with damages for two years of stress and financial hardship caused by the problem-plagued Phoenix pay system.

Leaders of 17 unions sent a letter to Trudeau to mark the second anniversary of the disastrous rollout of the error-prone Phoenix with a list of demands: rebuild the system using public servants; pay damages to compensate employees and issue a remission order to provide tax relief for employees who were overpaid.

“Our members no longer have any confidence in the pay process thanks to Phoenix,” the letter explains. “We ask your government to accept that it owes its employees compensation for the suffering they have endured and continue to face.

“Every day our members continue to provide Canadians with the reliable and critical services they need, despite an employer that cannot pay our members correctly for their work. The recommendations we have outlined… provide a fair and reasonable path forward. lt is our hope that you move quickly to implement them.”

Two years after the rollout of Phoenix, half of Canada’s public servants have some kind of pay problem and the backlog has hit a record high. The unions represent 225,000 of the 300,000 public servants paid by Phoenix.

The unions have been harsh critics of Phoenix from the start.

Led by the Public Service Alliance of Canada (PSAC), the unions originally begged the Trudeau government to stop or delay the two-stage rollout of Phoenix because the system and compensation advisers were not ready.

The unions proved right and pay problems quickly mushroomed. The government has since included labour leaders in a joint committee with senior management and consulted with them on how to address the mounting problems and delays created by Phoenix.

Leaders of the two largest unions, Debi Daviau, president of the Professional Institute of the Public Service (PIPSC) and PSAC President Robyn Benson met this week with the working group of ministers appointed by Trudeau to oversee the Phoenix crisis and presented unions’ concerns.

One union leader said the demands cap off two years of frustrations and “unions are fed up with band aid solutions for a pay system that can’t be fixed.”

“In the lead-up to and launch of Phoenix, the government ignored its employees and the unions that represent them,” said Benson in a statement. “The prime minister must learn from this mistake and act urgently on our requests to ease the hardship of our members caught in this nightmare.”

The unions are asking the government for a plan to work with federal employees to rebuild a payroll system that pays employees accurately and on time.

The letter calls the Phoenix debacle a “cautionary tale” against contracting out compensation management and the governments’ failure to listen to their own employees — both the Conservatives who initiated the $309-million pay overhaul and the Liberals who went live with Phoenix.

“The failure to utilize the in-house capacity and expertise of the workers who both designed, serviced and administered the former pay system has proven to be disastrous,” said the letter.

“lt is evident that federal public service workers are best equipped to pay our country’s largest workforce: the federal public service.”

PIPSC previously proposed a new pay system, built by public servants rather than the private sector, a plan the other unions now seem to support.

“Your government needs to present a clear plan to utilize and rebuild pay roll capacity in the public service,” the letter said.

“Our members, your employees, deserve to be paid correctly and on time for the work they do. We ask that you work with them to rebuild a pay roll system that can do just that.”

PIPSC’s proposal called for a second track or “parallel process” using federal technology workers to develop a new pay system while the government continues to pay employees with Phoenix. PIPSC, which represents technology workers, said it could be done within a year.

IBM built Phoenix based on the latest version of PeopleSoft. It adapted the off-the-shelf software for the government, with its 27 collective agreements and 80,000 pay rules.

“Our members deserve a federal payroll system that works,” said Daviau. “That will only happen when the government acknowledges it needs to nix Phoenix and begins working with our members on a system that isn’t programmed to fail.”

Public Services and Procurement Canada, the federal paymaster, has an action plan with more than 20 measures to ‘stabilize’ Phoenix by the end of the year. Stabilize means clearing the backlog and paying employees on time and properly. Progress has been slow and thwarted by the massive amount of work created by implementing collective agreements and racing to get accurate T4 slips issued for the tax season.

The government has so far resolved to keep Phoenix. However, both Treasury Board President Scott Brison and Public Services Minister Carla Qualtrough have indicated they are not wedded to Phoenix over the long term and are willing to look at alternatives.

The unions also argue the public servants should be made “whole” and deserve damages for the stress, time and hardship they have faced dealing with pay problems.

Unions and senior management have been in discussion about damages over and above the out-of-pocket expenses of employees that the government has already agreed to pick up because of Phoenix foul-ups.

Unions have also filed complaints seeking damages over the delays in implementing collective agreements. The Federal Public Sector Labour Relations and Employment Board found the government has breached its legal obligations with the late payments.

But unions say the most urgent problem is overpayments. The unions want the government to issue a blanket exemption so employees who were overpaid by Phoenix don’t have to repay the gross amount of those incorrect payments.

The government gave thousands of overpaid public servants a Jan. 19 deadline to report overpayments so their T4 slips could adjusted in time. If they met the deadline they would have to repay the net amount. If they missed it, they would have to pay the gross amount – which includes taxes and other deductions taken off on their behalf.

PSPC, however, has been unable to process all the claims of public servants who met the Jan. 19 deadline. About 8,000 claims were not processed.

This outraged unions which resumed their calls for an exemption. They argue it’s unfair that employees have to repay more money than they received for a problem they did not create.

“Throughout this saga, public servants have been steadfast; they keep showing up to work despite not getting paid correctly and continue to deliver world class services to Canadians,” said Canadian Association of Professional Employees President Greg Phillips.

“Likewise, they expect their leaders to show up with the same level of determination and commitment – to treat this issue with the urgency and seriousness it deserves.”