Grievances regarding Phoenix overpayment recoveries

As you may know, Treasury Board has begun a project to recover overpayments from our members that were caused by the disastrous Phoenix pay system.

Because of the six-year limitation period for the government to begin proceedings to recover these debts, the employer is rushing to send these letters out now.

Many of our members are writing to us asking how they can challenge the overpayment letter. Some owe a few hundred dollars; others owe as much as $50,000+.

PSAC’s legal team has indicated that we should be challenging these overpayment letters by filing individual grievances in certain situations, which are set out below. 

In all cases, members

  • Should respond to the overpayment notice letter by the deadline provided in the letter;
  • If they wish to challenge the recovery, should NOT select Option 1 in Annex B (i.e., should not acknowledge the overpayment);
  • Should request additional information or records if they are unable to verify the accuracy of the overpayment calculation.

To assist Local representatives, we have provided grievance language below.

NOTE: Filing the grievance will not halt the recovery of the overpayment. Make sure to fill out Annex B in your overpayment letter within the deadline provided even if you file a grievance.

Situations in which we should consider filing a Phoenix overpayment grievance

  1. The member’s overpayment was calculated incorrectly. Employees should carefully review the calculation of the overpayment and ensure it is correct. If an employee is at all uncertain about the accuracy of the calculation, they should file an individual grievance on this basis, even if they have not yet received all information and records to verify the calculation.
  2. Any part of the overpayment is more than 6 years old. Employees should carefully review the breakdown of the overpayment and ensure that all payments were issued no more than six years before the date of the letter. If any payments occurred more than six years before the letter, employees should file an individual grievance based on the expiry of the limitation period in the Crown Liability and Proceedings Act. For Example: Letter dated August 15th, 2022, any overpayments dated August 15th, 2016 and earlier would be statute barred.
  3. The member relied on the correctness of their pay to their detriment. Employees may be able to establish the legal doctrine of “promissory estoppel” as a defence to the recovery of the overpayment. There are two general categories of facts that may meet this standard: 
    • The employee was directly assured that their pay was correct or that they had no overpayment and relied on that assurance in some way. For example, the employee may have taken on a significant new expense, such as the purchase of a home, which they now cannot afford, or may have chosen to retire based on the amount of savings they had accrued, which is now impacted by the overpayment recovery.
    • The employee was unaware of the overpayment until the time of the employer’s letter and relied on the accuracy of their pay in some way, as described above (for example, by taking on a significant new expense, or choosing to retire based on the amount of savings they had accrued).
  4. The recovery of the overpayment would be unreasonable (financial hardship). Subsection 155(3) of the Financial Administration Act states that “[t]he Receiver General may recover…”, which gives the employer discretion to collect overpayments. Recovery is not mandatory, however. As such, the Board can assess whether this discretion was exercised in a reasonable manner with due consideration of all the circumstances, including the nature of the employer’s error and the employee’s personal circumstances. In some cases, the Board has found that it is unreasonable for an employer to collect an overpayment years after the fact, where doing so would cause the employee financial hardship.

Employees who will experience financial hardship because of the recovery of the overpayment may argue that the recovery is unreasonable in the circumstances. This hardship could arise because of taking on significant new expenses or choosing to retire based on the amount of an employee’s savings, or it could arise because of the employee’s changed financial circumstances since the time of the overpayment.

NOTE: Please contact USJEPhoenix_PhenixSESJ@PSAC-AFPC.com if you are considering filing a grievance based on financial hardship. You may also contact USJEPhoenix_PhenixSESJ@PSAC-AFPC.com if you have any questions regarding any of the above.

General Guidelines for Locals

Please note that not all members who have received overpayment letters should be grieving them. Please review the four possible grounds in the letter above and do a case-by-case assessment as to whether a grievance is appropriate based on those grounds. If none of those four grounds for challenging the overpayment apply, please do not file a grievance.

Include all potential grounds in the grievance: Some employees may have multiple grounds to challenge the overpayment and should be sure to include all potential grounds in their grievance.

File the grievance within the collective agreement timelines: Members who disagree with the overpayment should file a grievance. Members who file a grievance at this stage should still be encouraged to pursue any internal recourse that the employer makes available while the grievance proceeds. 

If you have any questions regarding the grievance deadline for your case, you can contact your local or email USJEPhoenix_PhenixSESJ@PSAC-AFPC.com.

Suggested Grievance Wording

Where overpayment calculation is incorrect, or where member is not given enough information to verify accuracy of overpayment:

  • I grieve that the Employer incorrectly calculated my alleged Phoenix overpayment, for which I received notice on __________ [date received notice of overpayment], and which I disputed by replying to the employer on __________ [date].
  • [IF APPLICABLE] I further grieve the Employer’s continued failure to provide an accounting of the overpayment or to reconcile my pay file, which I requested on __________ [date].

Where overpayment was clawed back without member being given a notice or accounting:

  • I grieve the lack of pay file reconciliation prior to clawing back the Phoenix overpayment, which caused me [IF APPLICABLE] financial and personal hardship.
  • [IF APPLICABLE] I grieve the immediate clawback of my general damages payment for an overpayment for which I received no official notice or breakdown.

Where any part of the overpayment is more than six years old (from date of notice letter):

  • I grieve the Employer’s request that I repay a Phoenix overpayment for which I received notice on __________ [date received notice of overpayment] as the overpayment is more than six years old and outside the limitation period provided for in the Crown Liability and Proceedings Act.

Where the member relied on assurances about the correctness of their pay to their detriment:

  • I grieve the Employer’s recovery of a Phoenix overpayment after the Employer advised me on __________[date] that I had no overpayment [OR] that my pay was correct. I grieve that I relied on this assurance to my detriment by [IF APPLICABLE] taking on a significant new expense [OR] choosing to retire based on the savings I had accrued [or explain how the grievor relied on the assurance].

*OR*

  • I grieve the Employer’s recovery of a Phoenix overpayment as I was unaware that I had an overpayment until receiving the Employer’s letter on __________ [date]. I relied on the accuracy of my pay to my detriment by [IF APPLICABLE] taking on a significant new expense [OR] choosing to retire based on the savings I had accrued [or explain how the grievor relied on their belief that their pay was correct].

Where recovery of overpayment is unjust or unreasonable in circumstances – for example financial hardship:

  • I grieve that the Employer’s recovery of this Phoenix overpayment would be unreasonable and unjust because

[IF APPLICABLE] it would cause me significant personal or financial hardship [provide more detail specific to the grievor’s situation]

[IF APPLICABLE] my financial situation has changed since the time of the overpayment and I am not in a position to repay it [provide more detail specific to the grievor’s situation]

ALSO INSERT:

This is a violation of Article ______ [insert Article #]  – Pay administration, Article 6 – Managerial responsibilities and all other relevant articles.

NOTE: In the PA Collective Agreement this is Article 66; the SV Collective Agreement, this is Article 67; the TC Collective Agreement, this is Article 65; and the EB Collective Agreement, this is Article 26. 

Corrective Action

I request

  • A declaration that the Employer has breached the collective agreement;
  • That I be provided with a thorough breakdown of the overpayment;
  • That the Employer immediately stop recovery of the overpayment;
  • That the overpayment be deleted;
  • That the Employer reimburse any funds it has recovered thus far, with interest;
  • That I be compensated for pain and suffering experienced as a result of the Employer’s actions;
  • That I be compensated for the Employer’s willful and reckless actions;
  • That the filing of this grievance not prejudice me in any future dealings with the Employer;
  • That I be made whole;
  • Any other redress deemed appropriate.

NOTE: Filing a grievance will not halt the recovery of the overpayment. Make sure to fill out Annex B in your overpayment letter within the deadline provided even if you file a grievance.

If you need more information or support with your Phoenix grievance, please contact your Local President or Local Executive member. If they are not able to help, please contact your Regional Vice President.