'The negotiations have resulted in a fair and equitable settlement for class members to compensate for the moral damages they endured'
After nearly a decade of legal wrangling, the federal government has reached an out-of-court settlement to compensate non-unionized and casual federal employees affected by the long-standing issues of the Phoenix pay system.
Ezmie Bouchard – represented by Saraïlis Avocats – launched the class-action lawsuit in 2017, seeking compensation for “moral damages” caused by the Phoenix system’s failures. These malfunctions had wide-ranging impacts, from delayed payments to incorrect salaries, disrupting the personal and financial stability of thousands of employees.
"The Phoenix pay system caused major issues for thousands of federal employees. The government of Canada was a tough opponent in this case," said Christian Saraïlis, founding partner of Sarailis Avocats – which represents the plaintiffs.
“However, the negotiations have resulted in a fair and equitable settlement for class members to compensate for the moral damages they endured. Without this class action and the sustained efforts since 2017, non-unionized employees would have had little chance of receiving compensation for their moral damages. This is, in our view, a compelling example of justice achieved."
The lawsuit alleged some employees were paid too much before being forced to reimburse the difference, while others were not paid at all or did not receive the proper remuneration, according to a CBC report.
The agreement provides for individual payments to class members, calculated based on the number of eligible years they worked in one of the affected categories – including casual employees, student staff, term employees (less than three months), part-time employees working less than one-third of regular hours, and employees appointed by the Governor in Council.
The federal government has distributed millions of compensation hours to workers affected by the Phoenix pay system woes. But on the eighth anniversary of the launch of the Phoenix pay system, three unions called on the federal government to provide additional compensation for damages to workers who have been impacted by the system’s troubles.
The recent settlement will be submitted for approval to the Quebec Superior Court on Feb. 18, 2025, according to the law firm.
The law firm said it has issued a notice to class members to inform them of the settlement terms, the approval hearing, and the procedure to opt out of the class action, if desired. Class members can view the information at https://phoenixclassaction.ca.
In October, as part of its project to improve the HR and pay system for public sector workers, the federal government started Dayforce user sessions to provide workers with an opportunity to try the new payroll system and provide their feedback.
Ottawa set aside $135 million under Budget 2024 to boost the development of Dayforce – which is expected to replace the problematic Phoenix pay system within the next few years. Of that funding, $112.1 million is allocated to Public Services and Procurement Canada (PSPC) and $22.7 million is allocated to the Treasury Board of Canada Secretariat (TBS). The total includes an allocation of $85 million to amend the contract with Dayforce to continue to expand testing and design the system to our specific needs.
