OTTAWA -- Canada Revenue Agency workers are no longer the lone holdout against a federal government move to strip voluntary severance pay from civil servants.
The federal tax collection agency and its unionized employees reached a tentative contract settlement early Friday after years of bargaining, a deal that will give workers retroactive wage increases but take away the accumulation of severance.
The agreement is a much-needed bright spot for the government as it works to fix its troubled new pay system, which has left more than 80,000 civil servants short-changed or facing other payroll problems.
But it also puts CRA employees at the losing end of a battle to retain severance pay.
Until now, the Union of Taxation Employees, which exists as part of the larger Public Service Alliance of Canada, was the only federal bargaining agent that had not surrendered severance benefits for public servants who quit voluntarily.
"Severance is now coming out of our contract the same as everyone else," said a weary UTE president Bob Campbell, who led the union negotiating team.
The former Harper government negotiated deals with all other federal unions to surrender the accumulation of severance pay, which public servants would receive in lump-sum payments when they left voluntarily or retired.
As part of past deals, public servants had their accumulated severance cashed out.
The new CRA deal falls in line with those agreements, but adds negotiated wage hikes to the payouts and ends the accumulation of severance entitlements as of October 31.
Employees would then have three options to cash out their severance, calculated based on one week of pay for each year of continuous service to a maximum of 30 years.
The deal between CRA and UTE, which at times represents up to 26,000 workers, came after an all-night bargaining session that wrapped up years of labour turbulence just before daybreak.
Bargaining relations between the government and the union soured under the previous Conservative government when the Treasury Board was given ultimate authority to approve any contract changes, said Campbell.
"We had a great relationship (before the changes) where we negotiated two contracts without the contract expiring," he added.
But it was nothing but "delay, delay, delay" under Treasury Board, causing four years of frustrating bargaining, he said.
If approved, the agreement would give Canada Revenue Agency employees cumulative pay increases totalling up to 5.75 per cent, retroactive to 2012.
Both sides have also agreed to a so-called wage reopener, meaning even larger increases could be bargained for 2014 and 2015 wage rates in talks set to begin before the fall of 2017.
Each employee would also receive a $700 "signing bonus."
CRA officials acknowledged that an agreement was reached but declined to comment on its contents.
While the union's bargaining team is unanimously recommending acceptance of the deal, a ratification vote isn't expected for several weeks.
Should the contract be approved, there is concern that the government's Phoenix pay system may not be able to handle retroactive wage increases in a timely manner, said Campbell.
"We have a lot of term employees that are just scared to death every payday, whether or not it's going to be there, it's going to be a portion of it, or underpaid or overpaid," said Campbell.
Ever since the federal government launched the IBM-designed Phoenix system in February it's been plagued with problems. Some public servants who went unpaid or underpaid for months maxed out credit cards, went on stress leave, or quit because they could no longer afford to pay for daycare.
