Severance Pay


TO:   Executive Council
         Alternate Vice-Presidents
         Local Presidents

RE:  Severance Pay

Dear Sisters and Brothers:

The National Office of the Union of Taxation Employees (UTE) has recently received a number of enquiries from local and regional representatives concerning the issue of severance pay upon appointment to a position under the jurisdiction of another bargaining agent and/or another employer. Clause 63.03 of the Program Delivery and Administrative Services collective agreement between the Canada Revenue Agency (CRA) and the Public Service Alliance of Canada (PSAC) states the following:

63.03 Appointment to a Schedule I, IV or V Employer

Notwithstanding paragraph 63.01(b), an employee who resigns to accept an appointment with an organization listed in Schedule I, IV or V of the Financial Administration Act may choose not to be paid severance pay provided that the appointing organization will accept the employee’s service for its severance pay entitlement. [emphasis added]

Pursuant to this clause, for appointments to Program and Administrative Services positions (AS, CM, CR, DA, IS, OE, PM, ST or WP) within Treasury Board, Article 63 of the collective agreement between the PSAC and Treasury Board applies. Article 63 of this collective agreement allows for employees within three months of being appointed to the new position to select from one of the following options:

  • As a single payment at the rate of pay of the employee’s substantive position as of June 22, 2011; or
  • As a single payment at the time of termination and at the substantive rate of pay on the date of termination from the core public administration; or
  • As a combination of the options described above.

With respect to appointments from positions under the jurisdiction of the PSAC to positions under the jurisdiction of the Professional Institute of the Public Service of Canada (PIPSC), Article 19 of the collective agreement between the CRA and PIPSC applies. This article also allows for an employee within three months of being appointed to a position within a PIPSC bargaining unit, to select from three almost identical options as described above, save and except one variation as follows. For option one under the agreement between the CRA and PIPSC, the rate of pay of the employee’s substantive position is calculated as of July 10, 2012, the date of signing of that collective agreement.

It should be noted as well that the provisions contemplated in the Treasury Board agreements and the CRA and PIPSC agreement afford the “opting” provisions only for indeterminate appointments and for greater certainty, do not apply to “acting” or “temporary” positions.

As we are currently in the process of bargaining with the CRA and as we anticipate proposals from the employer with respect to severance pay, we suggest that representatives continue to stay abreast of the severance pay provisions in our collective agreement as well the agreements governing other parts of the federal public service and/or other bargaining agents. Affected members would also be well advised to direct their severance inquiries in writing to their managers and to managers of receiving employers.

Should you have any questions or require any further clarification, we encourage you to discuss the matter with your Regional Vice-President or the Labour Relations Officer assigned for your region.

In Solidarity,
Shane O'Brien's signature
Shane O’Brien
Senior Labour Relations Officer