Part VII - Special Provisions Regarding Alternative Delivery Initiatives

Preamble

The administration of the provisions of this Part will be guided by the following principles:

1. consistent, fair and reasonable treatment of employees;
2. value for money and affordability; and
3. maximization of employment opportunities for employees.

7.1 Definitions

For the purposes of this Part, an alternative delivery initiative (diversification des modes d’exécution) is the transfer of any work, undertaking or business of the core public administration to any body or corporation that is a separate agency or that is outside the core public administration;

For the purposes of this Part, a reasonable job offer (offre d’emploi raisonnable) is an offer of employment received from a new employer in the case of a Type 1 or Type 2 transitional employment arrangement, as determined in accordance with subsection 7.2.2;

For the purposes of this Part, a termination of employment (licenciement de l’employé) is the termination of employment referred to in paragraph 12(1)(f) of the Financial Administration Act (FAA).

7.2 General

Departments or organizations will, as soon as possible after the decision is made to proceed with an alternative delivery initiative (ADI), and if possible, not less than 180 days prior to the date of transfer, provide notice to the bargaining agents.

The notice to the bargaining agents will include: 1) the program being considered for ADI, 2) the reason for the ADI and 3) the type of approach anticipated for the initiative.

In cases of ADI, the parties will conduct meaningful consultation, with the respective bargaining agents, on human resource issues related to the ADI in order to provide information to the employee which will assist him/her in deciding on whether or not to accept the job offer.

A joint WFA-ADI committee will be created for ADI and will have equal representation from the department or organization and bargaining agents. By mutual agreement, the committee may include other participants. The joint WFA-ADI committee will define the rules of conduct of the committee.

Commercialization – In cases of commercialization where tendering will be part of the process, the members of the WFA-ADI Committee will make every reasonable effort to come to an agreement on the criteria related to human resource issues (e.g. terms and conditions of employment, pension and health care benefits, the take up number of employees), to be included in the RFP process. The committee will respect the contracting rules of the federal government.

7.2.1    The provisions of this Part apply only in the case of alternative delivery initiatives and are in exception to other provisions of this Directive. Employees who are affected by alternative delivery initiatives and who receive job offers from the new employer shall be treated in accordance with the provisions of this Part and, only where specifically indicated will other provisions of this Directive apply to them.

7.2.2    There are three types of transitional employment arrangements resulting from alternative delivery initiatives:

1. Type 1
   
   Type 1 arrangements meet all of the following criteria:
   1. legislated successor rights apply. Specific conditions for successor rights applications will be determined by the labour legislation governing the new employer;
   2. the Directive on Terms and Conditions of Employment, the terms of the collective agreement referred to therein and/or the applicable compensation plan will continue to apply to unrepresented and excluded employees until modified by the new employer or by the Federal Public Sector Labour Relations and Employment Board pursuant to a successor rights application;
   3. recognition of continuous employment in the core public administration, as defined in the Directive on Terms and Conditions of Employment, for purposes of determining the employee's entitlements under the collective agreement continued due to the application of successor rights;
   4. pension arrangements according to the Statement of Pension Principles set out in Appendix A, or, in cases where the test of reasonableness set out in that Statement is not met, payment of a lump-sum to employees pursuant to subsection 7.7.3;
   5. transitional employment guarantee: a two-year minimum employment guarantee with the new employer;
   6. coverage in each of the following core benefits: health benefits, long term disability insurance (LTDI) and dental plan;
   7. short-term disability bridging: recognition of the employee's earned but unused sick leave credits up to maximum of the new employer's LTDI waiting period.
2. Type 2
   
   Type 2 arrangements meet all of the following criteria:
   1. the average new hourly salary offered by the new employer (= rate of pay + equal pay adjustments + supervisory differential) for the group moving is 85 percent or greater of the group's current federal hourly remuneration (= pay + equal pay adjustments + supervisory differential), when the hours of work are the same;
   2. the average annual salary of the new employer (= rate of pay + equal pay adjustments + supervisory differential) for the group moving is 85 per cent or greater of federal annual remuneration (= percent or greater of federal annual remuneration (= pay + equal pay adjustments + supervisory differential), when the hours of work are different;
   3. pension arrangements according to the Statement of Pension Principles as set out in Appendix A, or in cases where the test of reasonableness set out in that Statement is not met, payment of a lump sum to employees pursuant to subsection 7.7.3;
   4. transitional employment guarantee: employment tenure equivalent to that of the permanent work force in receiving organizations or a two-year minimum employment guarantee;
   5. coverage in each area of the following core benefits: health benefits, long-term disability insurance (LTDI) and dental plan;
   6. short-term disability arrangement.
3. Type 3
   
   A Type 3 arrangement is any alternative delivery initiative that does not meet the criteria applying in Type 1 and 2 transitional employment arrangements.

7.2.3    For Type 1 and Type 2 transitional employment arrangements, the offer of employment from the new employer will be deemed to constitute a reasonable job offer for purposes of this Part.

7.2.4    For Type 3 transitional employment arrangements, an offer of employment from the new employer will not be deemed to constitute a reasonable job offer for purposes of this Part.

7.3 Responsibilities

7.3.1    Deputy heads will be responsible for deciding, after considering the criteria set out above, which of the types applies in the case of particular alternative delivery initiative.

7.3.2    Employees directly affected by alternative delivery initiatives are responsible for seriously considering job offers made by new employers and advising the home department or organization of their decision within the allowed period.

7.4 Notice of alternative delivery initiatives

7.4.1    Where alternative delivery initiatives are being undertaken, departments or organizations shall provide written notice to all employees offered employment by the new employer, giving them the opportunity to choose whether they wish to accept the offer.

7.4.2    Following written notification, employees must indicate within a period of 60 days their intention to accept the employment offer.

7.5 Job offers from new employers

7.5.1    Employees subject to this Directive (see Application) and who do not accept the reasonable job offer from the new employer in the case of Type 1 or 2 transitional employment arrangements will be given four months’ notice of termination of employment and their employment will be terminated at the end of that period or on a mutually agreed upon date before the end of the four month notice period except where the employee was unaware of the offer or incapable of indicating an acceptance of the offer.

7.5.2    The deputy head may extend the notice of termination period for operational reasons, but no such extended period may end later than the date of the transfer to the new employer.

7.5.3    Employees who do not accept a job offer from the new employer in the case of Type 3 transitional employment arrangements may be declared opting or surplus by the deputy head in accordance with the provisions of the other parts of this Directive.

7.5.4    Employees who accept a job offer from the new employer in the case of any alternative delivery initiative will have their employment terminated on the date on which the transfer becomes effective, or on another date that may be designated by the home department or organization for operational reasons provided that this does not create a break in continuous service between the core public administration and the new employer.

7.6 Application of other provisions of the Directive

7.6.1    For greater certainty, the provisions of Part II, Official Notification, and Section 6.5, Retention payment, will apply in the case of an employee who refuses an offer of employment in the case of a Type 1 or 2 transitional employment arrangement. A payment under Section 6.5 may not be combined with a payment under the other section.

7.7 Lump-sum payments and salary top‑up allowances

7.7.1    Employees who are subject to this Directive (see Application) and who accept the offer of employment from the new employer in the case of Type 2 transitional employment arrangements will receive a sum equivalent to three months’ pay, payable upon the day on which the departmental/organizational work or function is transferred to the new employer. The home department or organization will also pay these employees an 18‑month salary top-up allowance equivalent to the difference between the remuneration applicable to their core public administration position and the salary applicable to their position with the new employer. This allowance will be paid as a lump sum, payable on the day on which the departmental/organizational work or function is transferred to the new employer.

7.7.2    In the case of individuals who accept an offer of employment from the new employer in the case of a Type 2 arrangement whose new hourly or annual salary falls below 80 percent of their former federal hourly or annual remuneration, departments or organizations will pay an additional six months of salary top-up allowance for a total of 24 months under this subsection and subsection 7.7.1. The salary top-up allowance equivalent to the difference between the remuneration applicable to their core public administration position and the salary applicable to their position with the new employer will be paid as a lump sum payable on the day on which the departmental/organizational work or function is transferred to the new employer.

7.7.3    Employees who accept the reasonable job offer from the successor employer in the case of a Type 1 or Type 2 transitional employment arrangement where the test of reasonableness referred to in the Statement of Pension Principles set out in Appendix A is not met, that is, where the actuarial value (cost) of the new employer's pension arrangements are less than 6.5 percent of pensionable payroll (excluding the employer's costs related to the administration of the plan) will receive a sum equivalent to three months’ pay, payable on the day on which the departmental/organizational work or function is transferred to the new employer.

7.7.4    Employees who accept an offer of employment from the new employer in the case of Type 3 transitional employment arrangements will receive a sum equivalent to six months’ pay payable on the day on which the departmental/organizational work or function is transferred to the new employer. The home department or organization will also pay these employees a 12-month salary top-up allowance equivalent to the difference between the remuneration applicable to their core public administration position and the salary applicable to their position with the new employer. The allowance will be paid as a lump sum, payable on the day on which the departmental/organizational work or function is transferred to the new employer. The total of the lump-sum payment and the salary top-up allowance provided under this section will not exceed an amount equivalent to one year's pay.

7.7.5    For the purposes of subsections 7.7.1, 7.7.2 and 7.7.4, the term “remuneration” includes and is limited to annual salary plus equal pay adjustments, if any, and supervisory differential, if any.

7.8 Reimbursement

7.8.1    An individual who receives a lump-sum payment and salary top-up allowance pursuant to subsection 7.7.1, 7.7.2, 7.7.3 or 7.7.4 and who is reappointed to that portion of the core public administration specified from time to time in Schedules I and IV to the Financial Administration Act at any point during the period covered by the total of the lump-sum payment and salary top-up allowance, if any, shall reimburse the Receiver General for Canada by an amount corresponding to the period from the effective date of reappointment to the end of the original period covered by the total of the lump-sum payment and salary top-up allowance, if any.

7.8.2    An individual who receives a lump-sum payment pursuant to subsection 7.6.1 and, as applicable, is either reappointed to that portion of the core public administration specified from time to time in Schedules I and IV to the Financial Administration Act or hired by the new employer at any point covered by the lump-sum payment, shall reimburse the Receiver General for Canada by an amount corresponding to the period from the effective date of the reappointment or hiring to the end of the original period covered by the lump-sum payment.

7.9 Vacation leave credits and severance pay

7.9.1    Notwithstanding the provisions of the employee's collective agreement concerning vacation leave, an employee who accepts a job offer pursuant to this Part may choose not to be paid for earned but unused vacation leave credits, provided that the new employer will accept these credits.

7.9.2    Notwithstanding the provisions of this Agreement concerning severance pay, an employee who accepts a reasonable job offer pursuant to this Part will not be paid severance pay where:

1. successor rights apply; and/or
2. in the case of a Type-2 transitional employment arrangement, when the new employer recognizes the employee’s years of continuous employment in the public service for severance pay purposes and provides severance pay entitlements similar to the employee’s severance pay entitlements at the time of the transfer.
3. However, where paragraphs (a) or (b) would apply, an employee who has a severance termination benefit entitlement under the terms of the severance pay article of their respective collective agreement shall be paid this entitlement at the time of transfer.

7.9.3 Where:

1. the conditions set out in subsection 7.9.2 are not met;
2. the severance provisions of the collective agreement are extracted from the collective agreement, by mutual consent of both parties, prior to the date of transfer to another non-federal public sector employer;
3. the employment of an employee is terminated pursuant to the terms of subsection 7.5.1; or
4. the employment of an employee who accepts a job offer from the new employer in a Type 3 transitional employment arrangement is terminated on the transfer of the function to the new employer;

the employee shall be deemed, for purposes of severance pay, to be involuntarily laid off on the day on which employment in the core public administration terminates.