ARCHIVED - Expenditure Review of Federal Public Sector - Volume Two - Compensation Snapshop and Historical Perspective, 1990 to 2003

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

6. Other Compensation Elements

In addition to their base salary, federal employees in the core public service and separate employer domains can earn compensation for such items as overtime, and for some employees, exceptional performance. This chapter examines the policies and expenditures over time for the following compensation elements:

• Performance pay
• Other allowances and premiums
• Overtime
• Retroactive payments.

We also discuss contributions to statutory programs made on behalf of employees, leave provisions and severance pay, all of which contribute to the cost of total compensation and to the overall compensation package for employees.

Performance (at risk) pay

In the core public service domain, there are three sets of employees whose pay plan includes some version of performance or at-risk pay, whereby they have to attain a prescribed performance level before they are eligible to re-earn part of their annual salary. These are: executives, excluded and unrepresented employees, and some represented employees.

Executives

As described in the previous chapters, members of the Executive (EX) and Deputy Minister (DM) groups are eligible for a variable amount of pay based on performance.

Performance Management Program

For 2002–03, salary increases related to the Performance Management Program totalled about $9 million. Total performance-related lump sum payments were about $32.1 million. There were about 4,350 EXs and DMs in March 2003, over 90% of whom received either a salary increase or a lump sum payment. The average payment for those receiving a lump sum was about $7,400. The previous chapter provides details on executive performance pay back to 1980-81. We include this information there because of the close link for executives between salary and at-risk pay.

Excluded and unrepresented employees

A further 325 employees in the Defence Scientist (DS), Law (LA), and Medicine (MD) groups, whose pay is at levels comparable to that of the Executive group, participate in the Performance Management Program on the same basis as executives. Using the 7% allocation of the relevant salary mass as a rough guide, the estimated cost of performance pay for this group in 2002–03 would be in the area of $2.8 million.

Senior employees in several non-executive classification groups are eligible for a form of performance pay. Increases of up to 10% of current salary can be awarded, based on the level of performance. Once an employee reaches the maximum for his or her level, performance pay is paid as a lump sum. Departments are allotted 5% of the relevant salary mass, and are expected to live within it for the total of salary increases and lump sum payments.

Those eligible include employees who are not subject to a collective agreement, and who are classified in the top one or two levels of the following groups:

• Administrative Services (AS),
• Financial Administration (FI),
• Information Services (IS),
• Personnel Administration (PE),
• Purchasing and Supply (PG),
• Translation (TR), and
• Welfare Programs (WP).

All members of the Law (LA) group at levels 1, 2A and 2B are eligible. One specialized sub-group, the Mediation/Conciliation Officers is eligible at all levels.

In total, about 3,200 employees had access to this form of performance pay in 2002–03.

Information on the exact numbers receiving performance pay and the specific amounts paid in this area is not readily available. The Treasury Board Secretariat discontinued reporting requirements in the late 1990s. However, since 1997–98, a performance pay budget equal to 5% of the relevant employees' salary mass has been available for salary increases within a pay range, or for lump sums for those at the level maximum. The total amount of performance pay for non-executives increased from about $6.9 million in 1997–98 (covering about 1,500 recipients), to around $12.2 million in 2002–03 (for about 2,800 recipients). Amounts paid in earlier years would have been smaller, or nil during pay freezes such as in the mid-1990s.

Represented employees

Union members who are classified in the non-executive groups and levels referred to in the previous section are also eligible for a modified form of performance pay. Those who are not at the maximum pay for their position can receive increases which, on average, should equal what is called "two increments," with the value of an increment being specified from time to time by the Treasury Board. For the period 2000 to 2003 it was set at $750. The actual amount for an individual can vary based on performance, provided the average of two increments is respected. No lump sums are payable to these employees.

About 1,200 employees are included in the definition of those eligible, although many would already be at their maximum pay rate. If we assume at least half of those affected are at this maximum, the total salary increases under this policy in 2002–03 would not exceed $900,000.

One unionized group, the Translators (TRs), has a financial incentive plan that provides extra pay based on an individual's production above the level of translation output required for the Translation Bureau to recover its costs from the departments and agencies it serves. Participation is voluntary. Annual target quotas are set for each classification level, based on forecasts of the Bureau's costs and revenues. Such extra production saves the Bureau the cost of contracting work out.

Translators share in the extra revenue according to a formula. The approximately 500 translators participating in this arrangement in 2002–03 received a total of about $2 million in incentive pay, or about $4,000 per participant.

The incentive pay plan for unionized members of the Translation (TR) group was originally implemented in 1999–2000. The value was about $800,000 for 360 participants the first year, nearly $3.5 million for 550 participants in 2000–01, and approximately $1.6 million and $2 million for about 500 employees in each of the next two fiscal years.

The University Teaching (UT) group has a tailored arrangement in their collective agreement that permits professors rated superior to advance two increments instead of one (or three increments for a "distinguished professor"), if they are not at the maximum pay for their level. If they are at the maximum, they may receive an equivalent lump sum payment. The value of UT group lump sums in 2002–03 was about $140,000.

Table 2043 summarizes our best estimate of the amounts paid for this purpose in 2002–03 for the three sets of employees described in this section.

Table 2043 Summary of estimated performance (at risk) pay for employees in the core public service domain, 2002–03
Performance Pay Plan	Recipients	Salary increases ($M)	Lump sums ($M)	Total ($M)
EXs/DMs	4,368	9.0	32.1	41.1
Executive equivalent	325	◊	2.8	◊
Excluded and unrepresented employees	3,200	4.4	9.2	13.6
Represented employees	◊	0.9	◊	0.9
Translators	496	n/a	1.9	1.9
Total			46.0*
* We only give a total for the lump sum payments, since the salary increases will be reflected in future salaries. ◊ No estimate available

To attempt to construct a similar table for earlier years would have been much too complicated for this Review to undertake. As we observed earlier, however, in regard to Executives, total spending on performance pay for employees in the core public service would have been lower in previous years, or nil.

Separate employers

The main separate employers provide performance pay in various forms. CFIA and Parks Canada have regimes very similar to the core public service domain, as does the NRC for its Management group and senior personnel officers:

• In 2002–03, 126 CFIA managers, including 88 executives, received lump sum performance payments totalling about $740,000, and in-range increases of $194,000.
• For Parks Canada, 84 senior personnel, including 72 executives, earned about $580,000 in lump sum awards and around $120,000 in in-range increases.
• For the NRC, 125 eligible managers received lump sum payments adding up to about $940,000.

CCRA has a distinct plan that builds on the core public service model in two ways. First, it adds a third component of pay at risk for effective people management. Executives and excluded senior managers can earn a lump sum amount of up to 5% for this component, in addition to whatever they receive for ongoing and special commitments.

Second, CCRA has negotiated eligibility for performance pay for members of its Management (MG) group who are union members. For those who are members of the Professional Institute of the Public Service of Canada (PIPSC), a lump sum of up to 5% may be earned each year based on the assessment of their performance. For eligible members of the Public Service Alliance of Canada (PSAC), CCRA may provide up to 10 days each year of management performance leave for people management, based on the annual performance assessment. Total performance lump sum payments at CCRA in 2002–03, including the cash value of management leave granted as part of the PSAC agreement, amounted to about $11 million.

Other allowances and premiums

This component of total compensation includes a large array of specific payments serving diverse purposes. The amount paid in 2002–03 totalled about $382 million in the core public service. About 90 separate types of payments, most of which are provided for in the various collective agreements, cost at least $100,000 each.

The most significant payments are summarized below.

Allowance/Premium	Approximate 2002–03 Cost ($M)
Foreign service allowances Compensation for the additional costs resulting from service outside Canada; for a cost of living higher than that in the National Capital Region at certain posts; for the danger and difficulty in living at certain hardship posts.	$77.8
Supplementary payments related to Employment Insurance A top-up to maternity and parental benefits under the Employment Insurance Program, to 93% of regular pay. Assisted about 3,450 employees.	$62.0
Bilingualism bonus Provides $800/year for non-executive employees (except translators) in bilingual positions, who meet the linguistic profile of that position. Benefits over 50,000 employees.	$44.0
Premium pay for work on a holiday or in lieu of a statutory holiday	$29.6
Shift and weekend premiums	$24.0
Stand-by pay	$20.3
Isolated post allowances Cover exceptional costs resulting from working and living in designated isolated areas.	$18.9
Call-back pay	$13.3

Smaller allowances cover such topics as the penological factor ($6.4 million) for employees of the Correctional Service, who are not Corrections Officers (CXs), but who assume additional responsibility related to the custody of prison inmates; extra duties ($5.0 million); educational leave ($3.4 million); awards and rewards ($1.6 million).

Among dozens of small allowances are several that deal with health and safety matters, such as the safety footwear allowance ($136,000) or the dangerous goods allowance ($256,000); others deal with special duties such as the nuclear emergency response team allowance ($297,000), the nurse-in-charge allowance ($592,000), or the offender supervision allowance ($1.06 million).

There is some doubt about the completeness and accuracy of reporting on particular allowances. Given that the amounts spent are substantial, departments need to ensure their reporting in this area is correct. More work is needed to clarify definitions on what is included under various headings.

Separate employers

Among separate employers, other allowances and premiumsare generally similar to those paid in the core public service domain and most are mandated through collective agreements with PIPSC or PSAC. The total of such allowances in the separate employer domain is estimated at about $66.7 million in 2002–03, including the terminable allowances discussed in Volume One.

Retrospective—Other allowances and premiums

From a historical perspective, the main theme about allowances and premiums is stability. Most of the dozens of types of allowances, both those significant and minor in cost, have existed for many years in more or less their current form. The bilingualism bonus, for example, has remained unchanged at a flat $800 annually for those eligible since it was introduced in its present form in 1977. The only really substantial policy change was the extension in 2001 of salary top-up for those on Employment Insurance maternity/parental benefits to as much as a full year. Foreign service allowances were modified in 2001 after a thorough review, to treat employees at different levels more equitably in cost-of-living allowances, for example, to provide greater spousal assistance, and to become more family friendly.

The detailed data on allowances that was readily available to us only goes back to 1994–95, so we have limited ourselves to reviewing the period from then to 2002–03. Total expenditures in the combined core public service and separate employer domain rose from about $356 million in 1994–95 to around $430 million,^[59] an increase of approximately 21% in current dollars or essentially unchanged in constant 2002–03 dollars.

Figure 2044
Trends in expenditures on other allowances and premiums, selected years, 1998–99 to 2002–03

Display full size graphic

In constructing a more detailed trend analysis, however, we were unable to provide details for the separate employers such as CCRA that were separated from the core public service in the late 1990s. With this caveat in mind, Figure 2044 provides details for the core public service from 1998–99 to 2002–03.

A review of the data and trends leads us to highlight these points:

Foreign service allowances

The total value remained reasonably constant from 1994–95 to 2000–01, in the range of $56 to $64 million per year. Since the policy changes, the total has risen to about $78 million in 2002–03.

Supplementary payments related to Employment Insurance

As noted above, the duration of benefits was essentially doubled in 2001. After falling in value during the downsizing of the public service, from about $18.7 million in 1994–95 to around $13.9 million in 1997–98, it rose by over three times to about $62 million in 2002–03.^[60]

Bilingualism bonus

This has fluctuated in line with the number of those eligible to receive this allowance, costing between $40 million and $50 million per year.

Isolated post allowances

Payments in this area have fallen from more than $25 million in 1994–95 to as low as $14.2 million in 1999–2000, before increasing somewhat to $18.9 million in 2002–03. The number of recipients of the living cost differential, for example, diminished from over 5,500 in 1994–95 to about 3,600 in 2002–03. This presumably reflects the transfer of federal programs to Northern and aboriginal governments.

Allowances such as stand-by and call-back pay, as well as shift premiums and premiums for working on the weekend or a holiday

These payments grew by more than 50% between 1997–98 and 2002–03, tracking very closely the growth in the salary mass. Both increases in population and average salary would have contributed to this outcome.

There is not much of note among the numerous smaller allowances. We observe that a medium-size allowance for the penological factor grew from just over $4 million in 1994–95 to about $6.5 million in 2002–03. This increase resulted from both an increase in eligible employees from 7,400 to 9,900, as well as an increase in the maximum annual allowance from $1,600 to $2,200. One further point to recognize is the increase in awards and rewards from about $865,000 in 1999–2000 to around $1.6 million in 2002–03, an increase consistent with a greater attention by public service managers to recognizing exceptional performance among employees.

Overtime

For 2002–03, the total paid for overtime in the core public service domain was about $208 million. This was equivalent to about 2.3% of the applicable total salary mass as shown in Table 2045.

Table 2045 Summary of overtime payments in the core public service domain, 2002–03
Overtime category	Amounts ($M)	%
Regular working day	106.9	51
First day of rest	39.8	19
Second day of rest	36.4	18
Multiple categories in claim	17.3	8
Statutory holiday	7.7	4
Total overtime	208.1	100

Most collective agreements provide for overtime premiums to be paid for hours worked in excess of the normal workweek, typically 37.5 hours. Overtime should be authorized in advance by the employee's supervisor. For overtime on normal working days, and in most cases on a first day of rest, reimbursement is paid at 1.5 times the position's hourly rate. For overtime on statutory holidays or a second day of rest, or after a certain number of extra hours on a first day of rest, the rate is twice the regular hourly compensation. Note that overtime does not include call-back or stand-by allowances, shift premiums or other premiums for working at unusual times.

Compensation may be taken in cash or in time-off-in-lieu-of-cash (called "compensatory leave") with the supervisor's approval. In some cases, planned compensatory leave cannot be taken during the fiscal year, and is paid out in cash instead.

Amounts paid for 2002–03 overtime vary considerably across classification groups. Table 2046 provides details on overtime usage, salary mass and population for those groups earning at least 1.5% of the total amount spent on overtime.

The table illustrates that some large classification groups, such as the Program Administration (PM) group, the Administrative Services (AS) group, and the Computer Systems (CS) group, earn overtime more or less in line with their proportion of the overall salary mass of the core public service domain. The largest group, the Clerical and Regulatory (CR) group in fact has overtime charges substantially below their share of total payroll.

Other groups, however, earn considerably more. The Correctional Services (CX) group, for example, is paid overtime at a rate about three-and-one-half times their share of overall pay. Annual overtime per employee in this group is about $3,750, about 8% of their average salary. The Radio Operations (RO) group earns overtime at about ten times their proportion of the salary mass. Average overtime earnings in the group amount to about $11,800, or about 22.5% of average salary.

Presumably differences in the use of overtime reflect distinctions inherent in the nature and organization of the work across the various groups, or the impact of unusual work pressures, and not differences in culture or the rigour of staff management.

The Executive (EX) group and other senior staff excluded from union membership are not eligible for overtime. Surveys indicate that EXs work on average 52 hours per week, not including travel time and weekend work.^[61] Some executives receive management leave in partial compensation for long hours worked. Although records of such leave are spotty, management leave in excess of one or two weeks per year is rare. Even two weeks of management leave would only compensate for about 10% (on an hour-for-hour basis) of the reported average overtime.

Recognition and reimbursement of overtime for unionized workers is reportedly inconsistent. Persistent anecdotal evidence suggests that some analysts generally do not bill for overtime, or only for part of the extra hours they work. It is not clear to what extent this may be a personal choice rooted in some employees' self-image as professionals, or a result of a workplace climate in some organizations or professions that discourages claiming overtime.

Overall it seems clear that if all overtime work were reimbursed, the total cost to the employer would be substantially greater.

Separate employers

Overtime premiums for separate employerswere about $143.7 million in 2002–03. CCRA paid about $103.7 million, an amount equivalent to about 4.4% of the Agency's salary mass. This is just less than twice the ratio of overtime to salary (2.3%) paid overall in the core public service domain. Parks Canada pays an overtime proportion (2.4%) similar to the core public service figure, while CFIA pays an even greater proportion than CCRA at about 6.7%. These differences likely reflect the highly operational, front-line nature of these agencies. Consistent with this view, the proportion for the NRC, which is mainly a research institution, is relatively low, at about 2%.

Retrospective—Overtime

Overtime provisions of the various collective agreements did not change significantly over the past decade. Table 2047 and Figure 2048 set out the pattern of overtime usage across the core public service domain from 1991–92 to 2002–03. Usage for the first year was about $286 million, or $349 million in constant 2003 dollars. If we add to the 2002–03 amount in Table 2047 the overtime payments of the principal separate employers (about $144 million), the total in the later year was around $352 million. These two amounts are effectively equal, which seems remarkable in view of the operational and financial vagaries that can cause overtime requirements to fluctuate. Even the proportion of the total salary mass is very close at 3.2% in 1991–92 and 2.8% in 2002–03 (including the main separate employers). The overtime cost per employee was generally in the range of $1,080 to $1,365 each year.

Table 2047 Pattern of overtime usage in the core public service domain, 1991–92 to 2002–03 (selected years)
	1991–92	1994–95	1997–98	1999–00	2002–03
Population*	237,139	225,073	187,928	165,171	167,618
Payroll ($M)	8,966	9,150	7,733	7,553	9,022
Overtime reg. working day ($m)	131.1	107.1	108.2	121.2	106.9
Overtime 1st day of rest ($m)	58.1	51.2	42.3	42.7	39.8
Overtime 2nd day of rest ($m)	61.0	56.9	32.1	37.6	36.4
Overtime accumulated ($m)	21.2	15.4	12.4	13.1	17.3
Overtime statutory holiday ($m)	14.9	12.9	12.1	10.9	7.8
Total (current dollars) ($M)	286.4	243.5	207.1	225.6	208.1
Overtime cost per capita ($)	1,207.6	1,081.7	1,101.8	1,365.8	1,241.3
Percentage of Payroll	3.2%	2.7%	2.7%	3.0%	2.3%
Total (constant dollars) ($M)	348.5	286.1	231.0	244.0	208.1
Overtime cost per capita ($)	1,469	1,271	1,229	1,477	1,241
* Populations are based on the end-of-quarter average of each fiscal year.

Figure 2048
Overtime pattern, selected years, 1991 to 2003

Display full size graphic

It is evident from reviewing the data in Table 2047 that the use of overtime has declined in relative terms over the past decade. Data for the intervening years not included in the table are quite similar, with the sole exception of 1993–94 when reported overtime usage was only $50 million. This was a year of extensive departmental restructuring and two changes of Prime Minister, so perhaps overtime use was constrained. More likely the reporting was faulty as financial systems were adapted to the new structures.

Since 1996–97, the top five groups in terms of overtime usage have consistently been the Correctional Services (CX), Program Administration (PM), Administrative Services (AS), Clerical and Regulatory (CR), and Computer Systems (CS) groups. While employees in these groups claimed more or less half of all overtime, which is generally in line with their share of the population in the core public service domain, for two of these groups, the share of overtime was much different from their proportion of the population. The CX classification group since 1997–98 has claimed between 10% and 15% of all overtime, although Correctional Officers constituted 2.6% (in 1997–98) rising to 3.5% (in 2002–03) of the workforce. Conversely, the CR group generally claimed overtime at around half or less the rate of their share of the total population. Table 2049 summarizes overtime usage for the 10 groups that claimed the greatest proportion of overtime in 2002–03.

Table 2049 Pattern of overtime claims between 1991–92 and 2002–03 among the 10 classification groups with the greatest share of usage in 2002–03
	1991–92			1994–95
	$M	OV %	POP %	$M	OV %	POP %
Correctional Services	24.4	8.5	1.8	24.2	9.9	2.0
Program Administration	43.5	15.2	13.6	37.2	15.3	15.4
Administrative Services	14.5	5.1	6.1	14	5.8	6.7
Clerical & Regulatory	31.7	11.1	25.1	19.1	7.8	21.9
Computer Systems Admin.	5.5	1.9	2.4	11.3	4.6	3.2
Engineering & Sc. Support	15.6	5.5	3.1	13	5.3	3.2
General Labour and Trades	17.1	6.0	6.1	15.3	6.3	5.3
General Technical	10.9	3.8	1.3	8.7	3.6	1.4
Ships' Crews	11.3	4.0	0.8	6.7	2.7	0.8
Radio Operations	5.4	1.9	0.5	4.4	1.8	0.6
Subtotal	179.9	63		153.9	63
Total, core public service	286.4	100		243.5	100

 

Table 2049 (cont'd) Pattern of overtime claims between 1991–92 and 2002–03 among the 10 classification groups with the greatest share of usage in 2002–03
	1997–98			1999–00			2002–03
	$M	OV %	POP %	$M	OV %	POP %	$M	OV %	PO %
Correctional Services	22.6	10.9	2.6	34.4	15.2	3.6	23.2	11.2	3.5
Program Administration	38.4	18.5	17.9	33.3	14.8	9.7	22.6	10.9	9.9
Administrative Services	15.7	7.6	7.4	22.5	10.0	9.9	22	10.6	11.6
Clerical & Regulatory	20.7	10.0	21.6	19.8	8.8	20.2	19.2	9.2	18.5
Computer Systems Admin.	19.8	9.6	4.7	19.8	8.8	5.5	14.5	7.0	6.5
Engineering & Sc. Support	10.6	5.1	3.0	11.1	4.9	4.0	14	6.7	3.8
General Labour and Trades	13.5	6.5	4.2	10	4.4	3.9	10.7	5.1	3.3
General Technical	6.8	3.3	1.2	7.1	3.2	1.2	6.8	3.3	1.2
Ships' Crews	3.9	1.9	0.8	3.4	1.5	0.9	4.5	2.2	0.8
Radio Operations	2.5	1.2	0.2	3.2	1.4	0.2	4.1	2.0	0.2
Subtotal	154.5	75		164.8	73		141.6	68
Total, core public service	207.1	100		225.6	100		208.1	100

Retroactive payments

Retroactive payments relate mainly to salary adjustments arising from the conclusion of new collective agreements. For 2002–03 this component amounted to about $247.2 million in the core public service.

The bulk of these payments relate to salary adjustments and resultant changes to such items as acting pay (i.e. extra pay to recognize a temporary assignment in a higher position) and overtime applicable to previous fiscal years. The amount can fluctuate greatly from year to year depending on the timing and size of salary increases in particular collective agreements. Future reports should attribute retroactive payments to the years to which they apply.

Separate employers

Retroactive salary payments amounted to about $30.6 million over the year across the separate employer domain. These covered salary adjustments due in previous fiscal years.

Retrospective—Retroactive payments

We have not attributed retroactive payments to the appropriate fiscal year because calculating the correct amounts and attributing those sums to the right groups and so on would be a huge task, with relatively little gain in the overall scale of compensation we are reporting.

Looking at selected years back to 1990–91, we observe that the amount of retroactive payments can vary dramatically from one year to the next:

Year	Retroactive Payments ($ M)
1990–91	450.7
1993–94	81.7
1997–98	107.4
2000–01	1,332.2
2002–03	247.2

The very large amount in 2000–01 was mainly relating to the pay equity settlement with the Public Service Alliance of the previous year. Over $900 million of this was for interest payments relating to the settlement.

Although the total is volatile and not related to the year in question, it is clear that there are retroactive payments, even in years (such as 1993–94) when there was no collective bargaining. Therefore, we have decided to use $250 million as a reasonable estimate of the annual impact of such payments, and we have added this to the total compensation picture.

Contributions to statutory programs

As an employer, the Treasury Board is required to contribute to certain programs in the same way as any other employer. The total for this component of total compensation amounted to about $653 million in 2002–03. The four main areas are described below.

Canada Pension Plan/Quebec Pension Plan

For 2002–03, all employers were required to contribute 4.95% of salary between the minimum contribution level ($3,500) and the year's maximum pensionable earnings ($39,100 in 2002, and $39,900 in 2003). For the core public service domain, this amounted to $265.6 million.

The matching amount contributed by employees was in fact somewhat lower ($261M) because some temporary employees and employees who were hired more than once in the year would have received reimbursements of overpayments through the income tax system, eventually lowering the total amount received by CCRA for the employees' contributions.

Employer contributions to the Canada and Quebec Pension Plans for the combined core public service and separate employer domains grew from $159 million in 1991–92 to about $400 million in both 2001–02 and 2002–03. In accordance with the applicable legislation, employee contributions were approximately the same amount.^[62]

Employment Insurance

Employer contributions for 2002–03 were $3.08 per $100 of insurable earnings in 2002, and $2.94 in 2003. In both years the maximum insurable earnings were $39,000. For the core public service domain, total employer contributions were $183 million.

Employer contributions are 1.4 times employee contributions. Therefore, employees would have contributed through payroll deductions about $130.7 million. Again this takes account of some income tax refunds to employees with low incomes, or who were hired more than once.

We estimate that the total employer contributions for Employment Insurance^[63] for the combined core public service and separate employer domains for selected years since 1990–91 were as follows:

Year	Estimated Employment Insurance premiums ($ millions)
1990–91	$ 178.0
1993–94	$ 268.5
1997–98	$ 263.2
2000–01	$ 288.0
2002–03	$ 256.4

The changes in these employer contributions generally followed two factors: (a) increases in Unemployment Insurance contribution rates in the early 1990s, followed by regular reductions; and (b) changes in the level of employment and the salary mass below the maximum level of insured income (in 2002 and 2003, this level was $39,000).

Employers contribute 1.4 times what employees contribute. On the other hand, employees may receive a refund of over-contributions (for example, if an employee works for two different employers during the year and contributes twice). Using the 1.4 factor in any case, we estimate that employee contributions in the years cited above were:

Provincial Health plans

Alberta and British Columbia still require residents to pay health care premiums. As a result of a National Joint Council agreement, the federal government shares these costs with employees in these provinces. In 2002–03, these amounted to $10.3 million for the core public service domain. Employees in those two provinces contributed an equivalent amount.

In addition to the plans described in this section, the federal government pays employer payroll health taxes required in Manitoba, Ontario, Quebec and Newfoundland. In 2002–03, the total paid was about $341 million. The portion attributable to the core public service domain was about $194 million.

Separate employers

Employer payroll deductions for the Canada/Quebec Pension Plans, for Employment Insurance, and for Provincial Health Insurance premiums in British Columbia and Alberta added up to about $190 million for the separate employers in 2002–03. In addition, payroll health tax contributions attributable to the separate employer domain were about $78.3 million.

Retrospective—Health and dental benefits

Since the general adoption of medicare in Canada in the late 1960s, the federal government has assisted its employees to meet provincial health premiums, and has complemented the public health plans of the provinces with supplementary protection for health services not deemed to be medically necessary.

Originally, five provinces (Manitoba, Alberta, British Columbia, Ontario and Saskatchewan) and the Yukon Territory levied medicare premiums. In response to union demands, the employer agreed to pay an amount similar to what it had paid for similar services prior to the introduction of medicare. In practice this meant that the Government would pay half of an employee's (or a pensioner's) provincial health care premium.

For employees residing in provinces without a health care premium, the Government established in 1971 the Health Insurance Remuneration Supplements program. Cash payments were made to eligible public service employees and pensioners, equivalent in principle to 25% of the per capita cost of medicare in the relevant province. In 1979, the rate was frozen at the 1978 rate. After Ontario established an employer health payroll tax in 1990 (as Quebec had done earlier), the Health Insurance Remuneration Supplements program was terminated. At the same time, the employer share of contributions for the Public Service Health Care Plan (PSHCP) was raised to 90% for employees (from the 75% level set in 1989) versus the traditional 50/50 cost sharing rate, and 75% for pensioners (up from 50%).

In at least one case, namely Alberta, the cost of paying 50% of the medicare premium was lower than the 25% per capita medicare cost in the province. As a result, the Government paid the larger amount to its employees and pensioners in Alberta, who then covered their premiums. By 1987, however, the Treasury Board adopted the policy of paying 50% of provincial health care premiums.

Table 2050 gives the amounts paid in relation to provincial health care plans, either as a contribution to medicare premiums levied on individuals, or through a health payroll tax.

Employer health care premiums (levied now only in Alberta and British Columbia) amounted to $9.2 million for employees of the core public service and separate employer domains in 1994–95. Except for 1995–96, when the amount totaled $10.9 million, these premiums remained in the range of $8 to $9 million until 2002–03 when they reached about $13.2 million as a result of premium increases in both Alberta and British Columbia.

Several provinces (since 1990, Manitoba, Ontario, Quebec and Newfoundland) have required employers to pay a payroll tax in support of their provincial health plan. This amount totalled in the mid $200 million area through the mid to late 1990s, and then rose to $341 million by 2002–03.

The Quebec sales tax on insurance plan premiums and administration costs represented a cost to the federal employer of about $4 million in 1993–94. It remained in the zone of $4 to $5 million until 2000–01, when the amount jumped to $16 million to cover retroactive premiums, and then levelled off at $9.5 million in 2001–02 and $11.2 million in 2002–03.

Employee leave

Although leave is paid for as part of salary, it is an important area of compensation policy since it is in fact paid time not worked. Leave entitlements for most employees are defined in the applicable collective agreements. The main categories of paid leave are described below.

Statutory holidays

The federal government recognizes 11 days per year as statutory holidays. This applies to all employees.

Vacation (annual) leave

Entitlement varies according to group and length of service. For unionized employees, the general pattern is this:

A few groups such as Research Scientists (RE), and University Teaching (UT) have four weeks of annual leave from the first year, and the Health Services (SH) group also does after one year. Executives have four weeks leave on appointment, five weeks after 10 years at that level (or 20 years in the public service), and six weeks after 28 years in the public service.

Employees are expected to use their vacation leave within the year. Normally any unused leave in excess of about one year's entitlement is paid out in cash at the end of the fiscal year. With his or her manager's approval, employees may cash out other annual leave.

Sick leave

This covers absence due to personal illness or injury. The employee's manager may require a confirming note from a physician. Leave is normally accumulated at the rate of 1.25 days per month worked (15 days per year). There is no cashing out of unused sick leave. The manager may advance sick leave credits, if deemed appropriate.

Family-related leave

Employees may use up to five days per year for carrying out family responsibilities such as caring for a sick relative.

Compensatory leave

This relates to time-off in lieu of overtime paid in cash.

Personal and volunteer service leave

Most unionized employees receive one leave day each year for any personal reason, and another for volunteer service.

Other paid leave

There are several other forms of paid leave to which employees can have access. These include leave for purposes such as injury-on-duty, bereavement, education etc.

Separate employers

For separate employers, employee leave generally follows the policies for the core public service domain. This is not surprising in that most employees are subject to collective agreements negotiated by unions operating in both employer domains. In the case of three of the largest separate employers (CCRA, CFIA and Parks Canada), it has been only a few years since they were carved out of the core public service. Nevertheless, some differences have emerged. For example, CCRA did not include in its contracts the one-day voluntary leave provision that was adopted in the core public service in 2001.

Leave usage rates

In total, employees in the core public service domain used about 7.74 million days of paid leave in 2002–03. This represented an average of about 41.2 days per year. We calculate that paid leave or time not worked had a total value of about $1.6 billion during the year, which is equivalent to about 18.4% of the relevant salary mass.

It could be argued that rest periods constitute a further element of time not worked. Although arrangements vary, many public servants take two health breaks of 15 minutes per day. Smokers may take more frequent breaks. Thirty minutes per day is equal to about 6.7% of the official workday. However, we have decided not to put any value on such breaks since it is highly variable to what extent employees stick strictly to a limit of seven and a half hours at work. For many employees, rest periods are balanced by unclaimed overtime, or blend into the work day as current issues are pursued with colleagues during breaks.

Table 2051 below sets out leave usage by principal categories in 2002–03, and provides an estimate of the value in equivalent salary cost of each category. The biggest area is naturally vacation leave, followed by statutory holidays and sick leave.

Table 2051 Leave usage* and estimated value by category in the core public service domain, 2002–03
Paid leave	Days (Millions)	Percentage (%)	Average days per capita	Estimated value ($ millions)
Vacation leave	3.2	42.0	17.3	677.3
Statutory holidays	2.1	26.7	11.0	430.8
Sick leave	1.6	20.2	8.3	325.3
Family related leave	0.3	3.8	1.6	61.7
Compensatory leave	0.2	2.6	1.1	41.4
Personal & volunteer leave	0.2	2.2	0.9	35.7
Other leave	0.2	2.6	1.1	41.3
Total	7.7	100	41.2	1,613.4
* Average usage in this table, and throughout this section is based on a total population of about 187,000. This is the total number of employees active in the leave system for any part of the fiscal year.

Vacation leave cash out

Employees must or may cash out vacation leave in certain circumstances. In 2002–03, the estimated value of such cash outs was about $41.8 million, the approximate equivalent of about 200,000 leave days.

Examples of leave usage by classification group

We took a look at which classification groups were the most frequent users on average of sick and family-related leave, summarized in Tables 2052 and 2053. In both cases, operational groups are most likely to use the available leave. Among groups with more than 500 members, the main user of sick leave was the Correctional Services (CX) group at 14.23 days on average per employee. That group also made the most regular use of family-related leave, using 4.44 days on average out of a maximum employee entitlement of 5 days per year. The next two groups with the most frequent use of sick leave were the Ship Repair (East) group (13.94 sick days on average), and the Heating, Power and Stationary Plant Operation (HP) group (11.7 days).

Table 2052 Summary of average sick leave usage by groups with a minimum population of 500 in the core public service domain, 2002–03
Occupational group	Employees	Total days of  sick leave	Average per employee	Average cost per employee
10 groups with the highest sick leave usage
Correctional Services	6,854	97,507	14.2	$2,967
Ship Repair (East)	657	9,161	13.9	$2,908
Heating, Power and Stationary Plant Operation	535	6,252	11.7	$2,437
Ship Repair (West)	664	7,645	11.5	$2,401
Welfare Programs	2,703	28,682	10.6	$2,213
Purchasing and Supply	2,511	25,272	10.1	$2,099
Hospital Services	802	7,909	9.9	$2,057
General Services	4,290	42,141	9.8	$2,049
Program Administration	19,057	180,921	9.5	$1,980
Social Science Support	3,909	36,439	9.3	$1,944
3 groups with the lowest sick leave usage
Scientific Regulation	1,970	6,508	3.3	$  689
Defense Scientific Services	602	1,995	3.3	$  691
Foreign Services	1,235	4,815	3.9	$ 813
Total, core public service	187,781	1,559,671	8.3	$1,731

Some groups were relatively infrequent users of sick leave and family-related leave. Among classification groups with at least 500 members, the lowest average use of sick leave (3.3 days) was among the Defence Scientific (DS) and the Scientific Research (SE) groups, followed by the Foreign Service (FS) group, with usage of 3.9 days on average. For family-related leave, the FS group and the Executive (EX) group made the least use of family related leave, at 0.5 days on average, followed by the SE group (0.6 days per capita).

Table 2053 Summary of average family-related leave (FRL) usage by groups with a minimum population of 500 in the core public service domain, 2002–03
Occupational groups	Employees	Total days of FRL	Average days per employee	Average cost per employee
10 groups with the highest FRL usage
Correctional Services	6,854	30,436	4.4	$926
Ship Repair (East)	657	2,791	4.2	$886
Ship Repair (West)	664	2,335	3.5	$733
Hospital Services	802	2,077	2.6	$540
Heating, Power and Stationary Plant Operation	535	1,357	2.5	$529
Welfare Programs	2,703	6,694	2.5	$517
General Services	4,290	8,090	1.9	$393
Nursing	1,868	3,484	1.9	$389
General Labour and Trades	7,631	14,009	1.8	$383
Clerical and Regulatory	37,107	64,702	1.7	$364
3 groups with the lowest FRL usage
Foreign Service	1,235	570	0.5	$96
Executive	4,496	2,383	0.5	$111
Scientific Research	1,970	1,189	0.6	$126
Total, core public service	187,781	295,833	1.5	$313

Sick leave usage

Overall average sick leave usage is substantially influenced by a relatively small number of employees who are suffering major illnesses. In 2002–03, the 5% of employees claiming 20 days or more of certified sick leave used about a quarter of total sick leave. Employees with 25 or more years of service were substantially more likely to use sick leave, claiming on average 14.4 days. These employees, who numbered about 28,600 in March 2003 (around 17% of the population), used about 26% of total sick leave.

Conversely, the cohort with less than 5 years' service used only about 5.6 days of sick leave on average. At about 35% of the population, they claimed about 21% of this form of leave. The cohorts with service between 5 and 24 years used sick leave roughly in proportion to their share of the population.

Use of leave without pay

Federal public service collective agreements also provide for leave without pay. In 2002–03, about 14,500 employees used such leave. The main purposes were: taking leave as part of an income-averaging plan (3,500 employees), illness or disability (3,200 employees), parental leave (2,100 employees) and maternity leave (1,400 employees).

Separate employers

Sick leave usage at CCRA in 2002–03 was generally higher than in the core public service domain. Nevertheless, the agency average of about 13 days per employee was broadly in line with some of the operational groups in the core public service. CFIA's rate of sick leave usage at 9.4 days per employee was just above the core public service average of 8.3 days. For Parks Canada, sick leave usage was lower, averaging 6.2 days per employee in 2002–03.

The total leave usage at CFIA was about 186,600 days including vacation, sick, compensatory (time in lieu of overtime), family, and injury-on-duty leave. Allowing 11 statutory holidays per employee, the overall total would be about 248,000 days. This would equate to a value of about $50 million for time not worked, or around 17% paid time not worked. This is a bit lower than our estimate of 18.4% for the core public service universe.

At CCRA total leave usage in 2002–03 was about 1.77 million days, equivalent roughly to about $338 million, or 13.5% of the salary mass. Sick leave was estimated to have a time-not-worked value of about $103 million, or 4.1% of payroll. This compares with an estimated value for sick leave of about 3.7% of payroll in the core public service.

Retrospective—Employee leave

We referred to the collective agreements applying to the Clerical and Regulatory (CR) classification group to trace how entitlements have developed since collective bargaining was adopted in 1967.

Vacation leave

Essentially what has occurred is that the number of years of service required to earn a given number of days of vacation, or annual leave has decreased over time.

From the beginning, in 1967, new employees received 15 days. Originally, 20 years of service was needed for 20 days of leave. This shrank to 8 years in 1989, and has remained there. The initial requirement of 25 years of service for 25 days of leave declined to 18 years in 1999. The possibility of 30 days of leave came with the collective agreement of 1989, after 30 years of service. By 2001, only 28 years of service was needed. In that year also, intermediate steps were introduced, such as 16 years for 22 days leave. Two additional days were also added, one for any personal reason, and one for voluntary service. Appendix N provides the details of this evolution. Entitlement to other forms of leave has continued unchanged since the 1980s.

Table 2054 provides an overview of total leave usage in the core public service domain for selected years since 1990. More detail is available in Appendix N. Total days leave per capita has been fairly constant—at about 40 days annually—for all reasons including statutory holidays, plus or minus about one day. The highest average was in 2002–03, the most recent year, which could be expected in view of the two extra personal/voluntary leave days agreed to in 2001. Vacation (annual) leave has also been quite steady, averaging between 16.4 days (1998–99) and 17.3 days (2002–03). Earlier access in one's career to particular levels of annual leave entitlement seems to have been substantially offset by departures from the public service or the cashing-out of leave entitlements, leaving the average usage little changed from year to year.

Table 2054 Summary of the usage of paid leave in the core public service domain for selected years since 1991
Year	Paid Leave	Days (millions)	%	Average days per capita	Estimated value ($M) current	Estimated value ($M ) constant	Estimated Value (% of the payroll)
2002–03 Payroll: $8,822 M	Vacation Leave	3.2	42.0%	17.3	$677.3	$677.3
	Statutory Holidays	2.1	26.7%	11.0	$430.8	$430.8
	Sick Leave	1.6	20.2%	8.3	$325.3	$325.3
	Family-Related Leave	0.3	3.8%	1.6	$61.7	$61.7
	Compensatory leave	0.2	2.6%	1.1	$41.4	$41.4
	Personal and Volunteer Leave	0.2	2.2%	0.9	$35.7	$35.7
	Other Leave	0.2	2.6%	1.1	$41.3	$41.3
	Total 2002–03	7.7	100.0%	41.2	$1,613.4	1,613.4	18.3%
1997–98 Payroll: $7,603 M	Vacation Leave	3.5	42.6%	16.9	$551.9	615.8
	Statutory Holidays	2.3	27.7%	11.0	$358.8	400.4
	Sick Leave	1.7	20.7%	8.2	$267.6	298.6
	Family-Related Leave	0.3	3.3%	1.3	$42.5	47.4
	Compensatory leave	0.2	2.5%	1.0	$32.3	36.0
	Personal and Volunteer Leave	0.0	0.0%	0.0	$0.0	0.0
	Other Leave	0.3	3.3%	1.3	$42.6	48.0
	Total 1997–98	8.2	100.0%	39.7	$1,295.7	1,446.2	17.0%
199–94 Payroll: $9,244 M	Vacation Leave	4.2	42.1%	17.1	$652.4	769.9
	Statutory Holidays	2.7	27.0%	11.0	$418.7	494.1
	Sick Leave	2.1	21.1%	8.6	$327.0	385.9
	Family-Related Leave	0.3	2.9%	1.2	$45.0	53.2
	Compensatory leave	0.3	2.8%	1.1	$43.3	51.1
	Personal and Volunteer Leave	0	0.0%	0.0	$0.0	0.0
	Other Leave	0.4	4.0%	1.6	$62.3	73.0
	Total 1993–94	10.03	100.0%	40.7	$1,548.74	1,827.1	16.7%
1991–92 Payroll: $8,871 M	Vacation Leave	4.0	41.8%	16.8	$581.8	708.0
	Statutory Holidays	2.6	27.5%	11.0	$381.9	464.6
	Sick Leave	2.1	21.8%	8.7	$303.6	369.5
	Family-Related Leave	0.3	2.7%	1.1	$37.5	45.7
	Compensatory leave	0.3	2.9%	1.2	$40.8	49.7
	Personal and Volunteer Leave	0.0	0.0%	0.0	$0.0	0.0
	Other Leave	0.3	3.2%	1.3	$44.6	54.3
	Total 1991–92	9.58	100.0%	40.0	$1,390.26	1,691.7	15.7%

Table 2054 also estimates the value of the time not worked, as well as the proportion that value constitutes of the salary mass. This estimate was calculated by multiplying the number of leave days reported (or in the case of the statutory holidays, an assumption of 11 days per employee), by the average salary per day for the whole core public service domain.^[64] It can be seen in the Table that the proportion of the salary mass paying for time not worked was generally in the range of 16% rising to 17% between 1990–91 and 1997–98. Thereafter, the proportion was in the range of 18%. Observing that total leave days per employee was fairly consistent throughout the 12 years covered in our analysis, it seems likely that the increased proportion for time not worked results in some way from the separation of the Canada Customs and Revenue Agency, as well as the Canadian Food Inspection Agency and Parks Canada, from the core public service domain.

Sick leave

Looking in more depth at the use of sick leave over the past 12 years, we can see distinct patterns of usage. At the most general level, the average number of sick days used per employee^[65] in the core public service domain stayed in the narrow range of 8.6 to 8.9 between 1990–91 and 1996–97. The average then declined to a low of 7.2 days in 1999–2000, before rising again steadily, to 8.3 in 2002–03.^[66] The dip may well result from disproportionate departures, through the period of downsizing, of employees with serious health problems. In fact, for the two years 1998–99 and 1999–2000 immediately following the Program Review staff reductions, the share of employees claiming 20 or more days of sick leave was unusually low, at 4.4%, while the share claiming fewer than 5 days was especially high at nearly 54%.

The distribution of employees (in this case those employed for the full year) by the number of sick leave days used was also notably stable. Except for two of the twelve years examined, between 46% and 49% of employees used fewer than 5 days of sick leave during the year. At the other end of the continuum, the proportion using 20 days or more was between 4.4% and 5%, except for the most recent three fiscal years when the level rose steadily to reach 6.3% in 2002–03.

Remarkably, the distribution of sick leave usage by classification group changed little over these years as well. Appendix O gives details on those groups using the most and the least sick leave per employee. For all but three of the thirteen years we analysed (from 1990–91 to 2002–03), five classification groups consistently used the most sick leave per capita. These were the Correctional Services (CX), Ship Repair (East), Ship Repair (West), Heating, Power and Stationary Plant Operation (HP), and Hospital Services (HS) groups. The CX group used the most sick leave per capita in ten of the thirteen years. The group average usage varied from a low of 12.73 days in 1997–98 to a high of 14.73 in 2001–02.

It is important to note that since 1998–99, employees who work regularly on shifts (which includes most of the members of the CX group, for example, as well as many employees in the other groups cited) accumulate an extra 2 days of sick leave per year, which cannot be carried over into the next fiscal year.

The same unchanging pattern applies to the three groups using the fewest days of sick leave per employee. For all thirteen years, the same three classification groups were absent the least on account of sickness. These were: the Defence Scientific Services (DS), the Foreign Service (FS), and the Scientific Regulation (SG-SRE) groups. Usage for any of these groups never exceeded 3.9 days per employee, and was often below 2.5 days for one or more of these groups. It is understandable that operational work, often in difficult environments like penitentiaries or dockyards, would give rise to more claims for sick leave than scientific work in laboratories or serving Canada abroad. However, what could be termed the rigidity of the levels of usage by different groups, both in absolute and in relative terms, sustained over thirteen years through changing circumstances, suggests that cultural and management factors may also play a role in the level of demand for sick leave. There may also be inconsistency in how rigorously sick leave is recorded across the public service.

Family-related leave

We also examined the usage of family-related leave. Between 1990–91 and 2002–03 there has been a slow, generally steady increase in the usage of such leave, from 1.1 day per employee at the beginning, to 1.6  days on average at the end of the thirteen years.

Looking again at the picture of usage by classification group for the ten groups with the highest usage, and the three groups with the lowest usage, we see almost no change in the groups' relative position. In each of the 13 years covered, the top three groups in descending level of average usage were: the Correctional Services (CX), the Ship Repair (East), and the Ship Repair (West) groups. The Hospital Services (HS), the Welfare Programmes (WP), and the Heating, Power and Stationary Plant Operation (HP) groups took turns in filling the fourth and fifth place each year. Usage per employee within the CX group was never below 4 days (the maximum annual entitlement is 5 days), and in 8 of the 13 years usage was between 4.33 and 4.47 days per employee.

Three groups consistently used the fewest days of family-related leave: the Foreign Service (FS), the Executive (EX), and the Scientific Regulation (SG‑SRE) classification groups. For these groups, usage per employee only reached 0.6 days for one group once. More typically, such absences averaged below 0.4 days; we did observe a trend to usage more in the range of 0.5 days toward the end of the period examined.

Cashing of Vacation leave

Finally in the area of vacation leave, we note that employees may request that some of their leave be paid in cash, rather than in time away from work. The Treasury Board policy as well is that managers should direct the paying out of leave not taken within a fiscal year if the employee's accumulated bank of leave is greater than one year's worth. Recorded expenditures and the corresponding number of recipients for selected years over the past decade were as follows:

	Vacation cash-outs
Year	Recipients	Amounts Paid Out (M)
1994–95	11,379	$37.05
1998–99	11,859	$32.17
2002–03	14,003	$41.81

Severance pay

Federal government collective agreements generally provide for severance pay to be given to employees when their employment ends. If the employee retires, is laid off, terminated for incapacity, or dies, the normal entitlement is one week's pay at the current rate for each year of service, to a maximum of 30 weeks. For non-unionized employees, the maximum is normally 28 weeks. An employee who resigns, or is terminated for incompetence, after at least 10 years' continuous service is entitled to one-half a week's pay per year of service.

Payments for severance in 2002–03 in the core public service domain amounted to about $87.9 million. About $67.9 million was paid into a Registered Retirement Savings Plan. Recipients numbered about 4,420, for an average severance payment of nearly $20,000.

Although our approach to assessing total compensation is based on current expenditure, it is pertinent to note the liability incurred by the federal government for future severance pay. It is estimated that for the core public service domain, severance pay obligations arising from service in 2002–03 totalled about $193 million. For the government as a whole, the Public Accounts^[67] estimate the total future benefit liability at about $3.57 billion. This liability represents payments that will be made to current employees upon their departure in future years, as a result of their service rendered to date.

Separate employers

Severance pay was reported in the Public Accountsas adding up to about $33.2 million for the separate employers in 2002–03.

Retrospective—Severance pay

We used, once again, the collective agreement for the largest classification group, the Clerical and Regulatory (CR) group, as indicative of the evolution of this entitlement for public servants generally. The basic terms have remained virtually unchanged since collective bargaining commenced in the late 1960s. The only substantive changes have been the following.

1. An increase in 1989 from 28 to 30 as the maximum numbers of years to be counted in calculating the severance amount on retirement or death.
2. At the same time, partial payments for part of a year of service were introduced.
3. For layoffs, beginning in 1989, it was agreed that there would be no limit on the number of years of service that could be counted, and from 1998 that partial years would be recognized in determining the amount paid.
4. In 1971, those rejected on probation became eligible also, with a minimum of one year's service.

Figure 2055 illustrates the history of severance pay and related termination benefits from 1990–91 to 2002–03. The higher line is the amount reported in the Public Accounts (economic object 107). These figures cover all end-of-service payments in the core public service and separate employer domains. The scope of such payments is broader than severance pay strictly defined, including most notably payments under the Early Departure Incentive (EDI) program that was in place in the middle 1990s to ease the downsizing of the public service. The lower line is specifically severance pay, only in the core public service domain.^[68]

Figure 2055
Severance pay and termination benefits, 1990–91 to 2002–03

Display full size graphic

The large increase in both lines during the middle 1990s resulted from the large‑scale downsizing needed to implement Program Review. The distinctly lower severance payments in the core public service domain after the downsizing compared with the period before Program Review is probably the result of two factors: the shrinking of the population, and the likelihood that incentives to leave the public service during Program Review would have attracted many who otherwise would normally have retired in the late 1990s or early 2000s.^[69]

It is interesting to report on the origins of severance pay. Starting in 1923, the Civil Service Regulations provided for "retiring leave" to be granted to employees departing because of resignation, retirement, ill-health or lay-off. One month of leave was provided for each five years of service, to a maximum of six months' leave. Initially, to be eligible, an employee needed to have accumulated an equivalent amount of sick leave credits.^[70] Management sought eventually to convert the leave to a cash payment, since positions could not be filled until the employee actually left the public service. Such a policy was adopted in 1957, except for employees over 59.5 years of age, who retained the option of taking leave or cash in lieu of leave. When collective bargaining began many of the negotiators, more familiar with severance pay in a private sector context, negotiated essentially the severance pay arrangements we now have.

 

• Previous Page
• Table of Contents
• Next Page