CD 2012-020

Subject: Procedures for Work Force Adjustment

November 7, 2012 Updated March 12, 2013

1. Purpose

1.1. The purpose of this directive is to provide updated information on the processing of payments in the Regional Pay System (RPS) under the provisions of the Work Force Adjustment (WFA) policies, including the related Alternative Delivery Initiatives (ADI).

1.2. A notice of information to employees concerning the above subject has been included with this compensation directive (CD) and will also be posted in the "Are You a Public Service Employee?" page of the Compensation Sector Web site.

2. Cancellation

2.1. This document supersedes CDs 1996-037 and 1999-005, dated September 6, 1996, and February 10, 1999, respectively.

3. Background

3.1. This CD should be read in conjunction with the ARCHIVED Services Pay Directive 1989-143(39) dated November 9, 1989.

3.2. The WFA provisions, contained in the following authorities, apply to indeterminate employees:

The Work Force Adjustment Appendix to the Public Service Alliance of Canada (PSAC) collective agreements;
The Work Force Adjustment Appendix to the Professional Institute of the Public Service of Canada (PIPSC) collective agreements;
The Work Force Adjustment Appendix to the Union of Canadian Correctional Officers - CSN (UCCO-SACC - CSN) collective agreement; and,
The National Joint Council (NJC) Work Force Adjustment Directive (WFAD), which applies to non-EX excluded and unrepresented employees as well as represented employees under the Core Public Administration (CPA) who do not have explicit WFA provisions in their collective agreements.

It should be noted that although the provisions of the WFA appendix to collective agreements and the NJC WFA directive are similar in nature, there are variations in the content. Departments should refer to the applicable WFA policy instrument to ensure the provisions are applied correctly.

3.3. The WFA provisions for members of the Executive (EX) group and some senior-level groups that are subject to parts of the terms and conditions of employment of the EX group are contained in the Directive on Career Transition for Executives. A compensation directive for these groups will follow.

4. WFA Options

4.1. WFA is a situation that occurs when a deputy head decides that the services of one or more indeterminate employees will no longer be required beyond a specified date because of a lack of work, the discontinuance of a function, a relocation in which the employee does not wish to relocate, or an ADI.

The deputy head must determine which employees will receive a Guarantee of a Reasonable Job Offer (GRJO) and which ones will become opting employees.

4.2. An employee who receives an GRJO will be placed on surplus priority status until they receive or accept a Reasonable Job Offer (RJO), is laid off or resigns. An employee who refuses an RJO will be laid off but no sooner than six (6) months from the date the position was declared surplus, and remains in layoff priority status (unpaid) for one (1) year.

4.3. Where no GRJO is available, the opting employee is required to choose one of the following options: a twelve-month surplus priority period in which to secure an RJO; a lump sum Transition Support Measure (TSM); or, an Education Allowance, which is the TSM plus an amount of not more than $7,000, $10,000, or $11,000 (as per applicable WFA authority) for tuition fees, books, and mandatory equipment.

4.4. Part-time employees are entitled to the counselling services and the reimbursement of tuition fees and books on a prorated basis, based on their assigned work week.

5. Procedures and Instructions

5.1. Reason Codes - Leave Without Pay (LWOP) and Struck Off Strength (SOS)

The following LWOP and SOS reason codes are to be used to process the payments:

5.1.1. Employee refuses RJO

SOS reason code "11 - Layoff" is to be used for an employee who refuses an RJO.

5.1.2. Opting Employees

Options 6.3.1 (a) (i) and 6.3.1 (a) (ii) - SOS reason code "11 - Layoff" is to be used for employees who have not secured a job offer after the expiry of the 12-month surplus priority period (and the 120-day extension, where applicable).

Options 6.3.1 (a) (iii), 6.3.1 (b) and 6.3.1 (c) (i) - SOS reason code "04 - Resignation under the WFA program" is to be used for any employee who must resign under the WFA in order to be eligible for a lump sum payment (TSM, Pay in lieu of unfulfilled surplus notice and Education Allowance).

Option 6.3.1 (c) (ii) - LWOP reason code "L - Other Reasons" is to be used for those employees who choose an Education Allowance, delaying their departure and opting for LWOP for a maximum period of two years, while attending a learning institution. At the end of the LWOP, SOS reason code "11 - Layoff" is to be used.

Additional information on the LWOP reason codes is provided in the following sections of the Personnel-Pay Input Manual (PPIM): PPIM 14-8-3 and PPIM 4-4-13. Refer to PPIM 3-5-3 for information on the SOS reason for leaving codes.

5.1.3. Alternative Delivery Initiatives (ADI)

SOS reason codes 47, 48, or 49 (as appropriate) are to be used for all terminations related to an ADI situation. The particulars are as follows:

Code 47 ADI Termination - accept or refuse a type 1 job arrangement
Code 48 ADI Termination - accept or refuse a type 2 job arrangement
Code 49 ADI Termination - accept or refuse a type 3 job arrangement

5.2. Entitlement Codes - TSM and Education Allowance

NOTE: Only with option 6.3.1 (c) (ii) can the TSM be paid in one or two lump-sum payments amounts over a maximum of two years.

The particulars of the entitlement codes payable under the WFA are as follows:

5.2.1. Code 365 - TSM or Payments in Lieu of Forgone Benefits - Eligible

Code 365 is to be used to requisition that portion of the entitlement which is eligible to be transferred to a Registered Retirement Savings Plan (RRSP) or to a Registered Pension Plan (RPP).

5.2.2. Code 366 - TSM or Payments in Lieu of Forgone Benefits - Non-eligible

Code 366 is to be used to requisition that portion of the entitlement which exceeds the established limits for transfer to an RRSP or to an RPP. This payment is subject to income tax on lump-sum payments.

5.2.3. Code 367 - TSM Education Allowance or Compensation for Pension Reduction - Eligible

Code 367 is to be used to requisition that portion of the TSM entitlement or compensation for pension reduction which is eligible to be transferred to an RRSP or to an RPP.

5.2.4. Code 368 - TSM Education Allowance or Compensation for Pension Reduction - Non-Eligible

Code 368 is to be used to requisition that portion of the TSM entitlement or compensation for pension reduction which exceeds the established limits for transfer to an RRSP or to an RPP. This payment is subject to income tax on lump-sum payments.

5.2.5. Code 242 - TSM Education Allowance - LWOP

Code 242 is to be used to requisition that portion of the TSM entitlement when paid during the LWOP period. This allowance is not considered a retiring allowance; therefore, it is subject to income tax, Canada or Québec Pension Plan (CPP or QPP), Employment Insurance (EI) and, if applicable, Québec Parental Insurance Plan (QPIP) according to the Income Tax Act and the Québec Income Tax Act.

5.2.6. Code 239 - Reimbursement of Tuition Fees and Books

Code 239 is to be used for requesting the reimbursement of tuition fees and books of not more than $7,000 (for UCCO-SACC CSN), $10,000 (for PIPSC and PSAC WFA appendix) and $11,000 (for NJC WFAD). This payment is considered a taxable benefit and is subject to income tax, CPP or QPP, EI and, if applicable, QPIP according to the Income Tax Act and the Québec Income Tax Act.

5.3. Entitlement Codes - Pay in Lieu of Unfulfilled Surplus Period

5.3.1. Code 108 Retiring Allowance - Transferable and Code 051 Retiring Allowance - Non-Transferable

Codes 108 and 051 are to be used for requesting the pay in lieu of unfulfilled surplus period as provided for in sections 6.3.1 (a) (iii) of the applicable WFA authority.

5.4. Entitlement Codes - ADI

5.4.1. An ADI is the transfer of any work, undertaking or business of the public service to any body or corporation that is a separate employer or is outside the Public Service.

5.4.2. The amount of the ADI lump sum payment depends on the type of transitional employment arrangements. The employment arrangements are categorized into three types: type 1 for full continuity; type 2 for substantial continuity; and, type 3 for lesser continuity. For the qualifying criteria relating to the various transitional employment arrangements, refer to section 7.2.2 of the WFA appendix and the NJC WFA.

The particulars of the entitlement codes associated with the ADI are as follows:

5.4.3. ADI Lump Sum

Code 385 ADI Lump Sum - Transferable
Code 386 ADI Lump Sum - Non-Transferable

The corresponding payment provisions are three (3) months pay to accept a type 2 job arrangement or six (6) months pay to accept a type 3 job arrangement in an ADI situation.

Code 385 is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to an RPP. This payment is subject to income tax deductions, unless it is transferred to an RRSP or to an RPP.

Code 386 is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to an RPP and will therefore, automatically be designated as non-eligible on the employee's tax slips. This payment is subject to income tax deductions.

Full details of these payments are included in sections 7.7.1 to 7.7.4 of the applicable WFA authority.

5.4.4. ADI Pension Lump Sum

Code 387 ADI Pension Lump Sum - Transferable
Code 388 ADI Pension Lump Sum - Non-Transferable

The corresponding payment provisions are three (3) months pay to accept a type 1 or a type 2 job arrangement in an ADI situation where pension arrangements are below the prescribed standard.

Code 387 is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to an RPP. This payment is subject to income tax deductions, unless it is transferred to an RRSP or to an RPP.

Code 388 is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to an RPP and will therefore, automatically be designated as non-eligible on the employee's tax slips. This payment is subject to income tax deductions.

Full details of these payments are included in section 7.7.3 of the applicable WFA authority.

5.4.5. ADI Salary Top-up Allowance

Code 389 ADI Salary Top-up Allowance - Transferable
Code 390 ADI Salary Top-up Allowance - Non-Transferable

The corresponding payment provisions are a lump sum payment to top-up salary offered in a type 2 or type 3 job arrangement in an ADI situation.

Code 389 is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to an RPP. This payment is subject to income tax deductions unless it is transferred to an RRSP or to an RPP.

Code 390 is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to an RPP and will therefore, automatically be designated as non-eligible on the employee's tax slips. This payment is subject to income tax deductions.

Full details of these payments are included in section 7.7.1 to 7.7.4 of the applicable WFA authority.

5.4.6. Additional Salary Top-up Allowance

Code 391 ADI Additional Salary Top-up Allowance - Transferable
Code 392 ADI Additional Salary Top-up Allowance - Non-Transferable

The corresponding payment provisions are an additional six (6) months of salary top-up allowance in a type 2 job arrangement where new salary falls below 80% of former salary.

Code 391 is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to an RPP. This payment is subject to income tax deductions unless it is transferred to an RRSP or to an RPP.

Code 392 is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to an RPP and will therefore, automatically be designated as non-eligible on the employee's tax slips. This payment is subject to income tax deductions.

Full details of these payments are included in section 7.7.2 of the applicable WFA authority.

5.5. Entitlement Code - Counselling Services

5.5.1. Under subsection 6.3.6 of the WFA authority, all opting employees, excluding non-affected employees choosing to alternate, will be entitled to a payment of up to $600.00 towards counselling services in respect of their potential re-employment or retirement. Such counselling services may include financial, and job placement counselling services.

The Income Tax Act provides that payments for financial counselling or retraining services are taxable. However, payments for counselling services in respect of the potential re-employment or retirement of the employee are non-taxable. Where financial counselling is provided as part of retirement or re-employment counselling, this would not be taxable on the condition that it is a one time occurrence. Where on-going financial counselling is provided, this would constitute a taxable benefit even though it is given within retirement or re-employment counselling. Financial counselling services provided directly or indirectly by an employer normally produce a taxable benefit to the employee who receives the benefit. The benefit arising from assistance given by an employer with respect to the cost of retraining is also a taxable benefit under paragraph 6(1) (a) of the Income Tax Act.

5.5.2. A new entitlement code (1G3 - WFA Counselling Services) has been created in the RPS for the processing of the counselling services payments where these constitute a taxable benefit, which will also be reported on the employee's tax slips.

Payments for counselling services for re-employment or retirement, which are non-taxable are to be issued via the departmental finance office.

5.5.3. The new entitlement code for counselling services (1G3) is subject to the following deductions:

federal and provincial income tax;
employment insurance (EI);
Canada Pension Plan (CPP) or Quebec Pension Plan (QPP);
and, Quebec Parental Insurance Plan (QPIP).

5.5.4. The new code is not subject to the Disability Insurance (DI) Plan, the Long-term Disability Insurance (LTD) Plan, the Supplementary Death Benefit (SDB) Plan, the Public Service Management Insurance Plan (PSMIP) and the public service pension plan deductions.

5.5.5. The payment is not considered part of salary for pay purposes. As a result, entitlements related to pay situations (such as promotions or acting pay), will not be recalculated.

The payment is not to be used in calculating the 4% gratuity or other entitlements such as premium pay in lieu of statutory holidays.

6. Pay Input Requirements

6.1. Compensation advisors are responsible to manually process the WFA payments. The attached Appendix "A" provides a full list of the entitlement codes.

Updated With the exception of ENT 239 (Reimbursement of tuition fees and books ENT 242 (TSM Education Allowance - LWOP) and ENT 1G3 (WFA Financial Counselling), the WFA payments are considered termination payments. The account must therefore be in SOS status. Refer to PPIM 14-8-3 and PPIM 4-4-13 for additional information.

Updated 6.2. For entitlement codes 239, 242 and 1G3, the payments are to be reported with an Entitlement Commence (ENC - pay action code [PAC] 18C). The payment must be a lump sum.

The effective "From" date for ENT 242 must be the start of continuous employment or continuous/discontinuous service date (as per applicable WFA authority) and the effective "To" date must be the effective start date of the Temporarily Struck off Strength (T-SOS) period.

6.3. Report the remaining WFA payments by completing a Termination Entitlement (TEC) (PPIM 14-6-7 or PPIM 4-4-71-1) transaction with the applicable entitlement code.

Note that for entitlement codes 365, 366, 367 and 368, the input requirements are identical to current entitlement codes 054 (Severance Pay) and 051 (Retiring Allowance non-eligible).

6.4. Alternation Situations

6.4.1. The WFA agreements provide for an alternation process. Alternation occurs when an opting employee (not a surplus employee), who wishes to remain in the core public administration, exchanges positions with a non-affected employee (the alternate) willing to leave the core public administration with a TSM or with an Education Allowance.

Updated 6.4.2. Effective immediately, SOS and Taken on strength (TOS) transactions must be processed for the alternate employee in the case of alternations between Treasury Board (TB) departments.

Updated For opting employees, the Transfer-in (TIN) and Transfer-out (TOU) process will apply.

Updated 6.4.3. Note that the SOS/TOS process does not allow for accurate reporting of the payments issued to alternates via the RPS. The department that is receiving the alternate employee is responsible for tracking the payments to meet the TB reporting requirements.

Updated 6.4.4. As per current procedures, SOS and TOS transactions must be processed for the movement of employees between employers. Refer to ARCHIVED CD 2002-017 for the change of employer procedures.

Updated 6.4.5. To avoid overpayments, it is recommended that the accounts be placed in pending SOS status, reason Y, to stop the processing of the regular pay, based on the effective date of the alternation.

Updated This pay action must be followed by an SOS (PAC 02) with the appropriate reason code. Refer to PPIM 14-8-3 and PPIM 4-4-13 for additional information.

6.5. Reduction or Exemption for Withholding Tax

The Income Tax Act (section 60(J.1)) permits a reduction or an exemption from income of amounts, in whole or in part, as a retiring allowance, if the amounts are transferred to an RPP or to an RRSP.

6.5.1. Transfer of Eligible Retiring Allowance Amounts

Payments made under entitlement codes 108, 250, 363, 365, 367, 385, 387, 389 and 391 are considered as eligible retiring allowances for income tax purposes.

The only documentation required to transfer eligible retiring allowances is a letter from the employee. The information must include the amount to be transferred, the name and full address of the financial institution, and the RRSP account number to which the monies are to be transferred.

To determine how to calculate the eligible retiring allowances limit, please refer to ARCHIVED CD 2006-002, section 4.3.

6.5.2. Transfer of Non-Eligible Retiring Allowance Amounts

Payments made under entitlement codes 051, 279, 364, 366, 368, 386, 388, 390 and 392 are considered as non-eligible retiring allowances for income tax purposes.

The only documentation required to transfer non-eligible retiring allowances to an RRSP without the withholding of income tax at source, is:

a signed letter by the employee certifying that sufficient RRSP room is available; or,
a copy of the employee's latest "Notice of Assessment" from the Canada Revenue Agency (CRA), which will also have to be signed and dated by the employee.

Should the employee wish to personally deposit the money into an RRSP and want the federal and/or Quebec income tax waived, the employee must provide a letter of authorization from CRA and if applicable from Revenu Quebec (RQ).

6.5.3. Payment of Past Service from Retiring Allowances

Eligible retiring allowances applied against past service

There is no limit to the eligible portions of all retiring allowances that are applied against the payment of past service. Departments should ensure that income tax is not withheld from eligible retiring allowances transferred under Section 60(J.1) of the Income Tax Act to pay for past service.

Non-eligible retiring allowances applied against past service

The non-eligible portions of all retiring allowances that are applied against the payment of past service are subject to allowable limits. Please refer to ARCHIVED CD 2006-002, section 4.4 to determine these allowable limits. Departments should ensure that income tax is not withheld from non-eligible retiring allowances or other termination payments that are applied against the payment of past service and are within allowable limits.

6.5.4. Care should be taken to ensure that the appropriate entitlement codes are utilized. The proper codes must be used whether or not the employee requests a transfer of funds to an RRSP or to an RPP.

For further information concerning the determination of the limits for the transfer of funds to an RRSP or RPP, please refer to ARCHIVED CD 2006-002. The limit is to be taken into consideration as one lump sum (i.e. one limit can be used for all the retiring allowance payments).

6.5.5. Other Termination Payments

Employees who wish to have an income tax exemption at source for other termination payments that are not considered as retiring allowances for income tax purposes and that are not applied against a payment of past service, will need to request a tax waiver from CRA or RQ.

6.6. Processing of Tax Waivers

6.6.1. Compensation advisors must ensure that transactions for the tax waiver are reported with code 395 "Tax Exemption Supplementary - Federal" and code 396 "Tax Exemption Supplementary - Québec" in the same update as the WFA payments. The indicator "SS" must be entered in field 21 (pay period number or code). Refer to PPIM 4-4-71-1 and PPIM 14-6-7.

General information concerning tax waivers is provided in ARCHIVED CD 2006-002.

7. Pay Office Responsibilities

7.1. There are no new responsibilities to be assigned to pay offices as a result of this payment. Current pay office procedures remain in effect.

8. PPIM

8.1. The PPIM will be updated to incorporate the changes included in this directive.

9. Inquiries

9.1. Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.

Original Signed by
Carrie E. Roussin

Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference(s): CJA 9015-24

Appendix A

List of entitlement codes payable under the WFA

Following is the table that contains the entitlement codes for processing the Work Force Adjustment payments in the Regional Pay System.

Entitlement codes for processing the Work Force Adjustment payments.
Code	Title	WFA code authority	Description
051	Retiring Allowance Non-transferable	Section 6.3.1 (a) (iii)	Pay in lieu of unfulfilled surplus period Payment in lieu of notice
108	Retiring Allowance Eligible	Section 6.3.1 (a) (iii)	Pay in lieu of unfulfilled surplus period Payment in lieu of notice
239	Reimbursement of tuition fees and books	Section 6.3.1 (c)	A payment of not more than $7,000, $10,000 or $11,000 (as applicable) for the reimbursement of receipted expenses for tuition, books and mandatory equipment
242	Transition Support Measure (TSM) Education Allowance	Section 6.3.1 (c) (ii)	The employee delayed the departure date and went on leave without pay (LWOP) while attending a learning institution. Transition Support Measure (TSM) cash payment, option c) plus an amount of not more than $7000, $10,000 or $11,000 (as applicable) for tuition fees, books and equipment. If the TSM is paid after the LWOP period, meaning the employee has terminated employment use codes 367 or 368
250	Separation Benefit or Alternative Lump Sum Payment Eligible	Section 6.3	Separation benefit Alternative settlement of up to 15% of base salary
279	Separation Benefit or Alternative Lump Sum Payment Non-eligible	Section 6.3	Separation benefit Alternative settlement of up to 15% of base salary
363	Retention Payment Transferable	Section 6.4	Retention payment: total facility closure, relocation of work units, and alternative delivery initiative (ADI)
364	Retention Payment Non-transferable	Section 6.4	Retention payment: total facility closure, relocation of work units, and ADI
365	TSM or Payment in Lieu of Foregone Benefits Eligible	Section 6.3.1 (b)	TSM cash payment, resignation option b) Payment in lieu of foregone benefits
366	TSM or Payment in Lieu of Foregone Benefits Non-eligible	Section 6.3.1 (b)	TSM cash payment, resignation option b) Payment in lieu of foregone benefits
367	TSM Education Allowance or Compensation for Pension Reduction Eligible	Section 6.3.1 (c) (ii)	TSM cash payment, option c) plus an amount of not more than $7000, $10,000 or $11,000 (as applicable) for tuition fees, books or equipment. If the TSM is paid during the LWOP code 242 must be used. Up to 30% of salary for pension reduction
368	TSM Education Allowance or Non-eligible	Section 6.3.1 (c)	TSM cash payment, option c) plus an amount of not more than $7000, $10,000 or $11,000 (as applicable) for tuition fees, books or equipment. If the TSM is paid during the LWOP code 242 must be used. Up to 30% of salary for pension reduction
385	ADI Lump Sum Transferable	Sections 7.7.1 and 7.7.4	Three (3) months pay to accept a type 2 job arrangement or six (6) months pay to accept a type 3 job arrangement in an ADI situation
386	ADI Lump Sum Non-transferable	Sections 7.7.1 and 7.7.4	Three (3) months pay to accept a type 2 job arrangement or six (6) months pay to accept a type 3 job arrangement in an ADI situation
387	ADI Pension Lump Sum Transferable	Section 7.7.3	Three (3) months pay to accept a type 1 or type 2 job arrangement in an ADI situation where pension arrangements are below the prescribed standard
388	ADI Pension Lump Sum Non-transferable	Section 7.7.3	Three (3) months pay to accept a type 1 or type 2 job arrangement in an ADI situation where pension arrangements are below the prescribed standard
389	ADI Salary Top-up allowance Transferable	Sections 7.7.1 and 7.7.4	Lump sum payment to top-up salary offered in a type 2 or type 3 job arrangement in an ADI situation
390	ADI Salary Top-up allowance Non-transferable	Sections 7.7.1 and 7.7.4	Lump sum payment to top-up salary offered in a type 2 or type 3 job arrangement in an ADI situation
391	ADI Additional Salary Top-up allowance Transferable	Section 7.7.2	Additional six (6) months of salary top-up allowance in a type 2 job arrangement where new salary falls below 80% of former salary
392	ADI Additional Salary Top-up allowance Non-transferable	Section 7.7.2	Additional six (6) months of salary top-up allowance in a type 2 job arrangement where new salary falls below 80% of former salary
1G3	WFA Financial Counselling	Section 6.3.6	A payment of up to $600.00 for opting employees, excluding non-affected employees choosing to alternate, for counselling services in respect of potential re-employment or retirement where they constitute a taxable benefit (non-taxable payments are to be issued via the departmental finance office)

WFA Appendices:

Work Force Adjustment Appendix to the Public Service Alliance of Canada collective agreements
Work Force Adjustment Appendix to the Professional Institute of the Public Service of Canada collective agreements
Work Force Adjustment Appendix to the Union of Canadian Correctional Officers - CSN collective agreement
National Joint Council Work Force Adjustment Directive
Directive on Career Transition for Executives

Information Notice to Employees

Work Force Adjustment (WFA)

The purpose of this notice is to provide general information concerning the payments payable to employees under the provisions of the following WFA authorities:

The Work Force Adjustment Appendix to the Public Service Alliance of Canada (PSAC) collective agreements;
The Work Force Adjustment Appendix to the Professional Institute of the Public Service of Canada (PIPSC) collective agreements;
The Work Force Adjustment Appendix (2010) to the Union of Canadian Correctional Officers - CSN (UCCO-SACC - CSN collective agreement; and,
The National Joint Council (NJC) Work Force Adjustment Directive, which applies to non-EX excluded and unrepresented employees as well as represented employees under the Core Public Administration (CPA) who do not have explicit WFA provisions in their collective agreements.

Note that the WFA provisions for members of the Executive (EX) group and some senior-level groups that are subject to parts of the terms and conditions of employment of the EX group are contained in the Directive on Career Transition for Executives. A compensation directive for these groups will follow.

Employee Options

WFA is a situation that occurs when a deputy head decides that the services of one or more indeterminate employees will no longer be required beyond a specified date because of a lack of work, the discontinuance of a function, a relocation in which the employee does not wish to relocate, or an alternative delivery initiative.

The deputy head will determine which employees will receive a Guarantee of a Reasonable Job Offer (GRJO) and which ones will become opting employees.

An employee who receives an GRJO will be placed on surplus priority status until they receive or accept a Reasonable Job Offer (RJO), is laid off or resigns.

Where no GRJO is available, the opting employee is required to choose one of the following three options: a twelve-month surplus priority period in which to secure an RJO; a lump sum Transition Support Measure (TSM); or, an Education Allowance (TSM payment) plus a separate payment of not more than $7,000, $10,000 or $11,000 (as applicable) for reimbursement of receipted expenses for tuition from a learning institution and costs of books and mandatory equipment).

TSM

The TSM is a cash payment, based on the provisions of the WFA Appendix to the relevant collective agreement or the NJC WFA Directive. Employees choosing this option must resign but will be considered to be laid off for the purposes of severance pay.

Education Allowance

Employees may:

Resign from the public service but be considered to be laid off for severance pay purposes on the date of their departure

Delay their departure date and go on leave without pay (LWOP) for a maximum period of two years, while attending a learning institution. The TSM will be paid in one or two lump-sum amounts over a maximum two-year period. During this period, employees may continue to be public service benefit plan members and contribute both employer and employee share to the benefits plans and the Public Service Superannuation Plan. At the end of the two-year LWOP period, unless the employee has found alternate employment in the Public Service, the employee will be laid off in accordance with the Public Service Employment Act.

Reduction or Exemption for Withholding Tax

Updated All or a portion of the termination payments, subject to the limits as set out in the Income Tax Act, may be transferred to a registered pension plan (RPP) or a registered retirement savings plan (RRSP) as an "eligible" amount. Where the total of the payment exceeds the "eligible" amount, the remainder of the payment is considered as a "non-eligible" amount.

Transfer of Eligible Retiring Allowance Amounts

For the transfer of eligible retiring allowances, you will need to provide your compensation advisor with a letter specifying the amount to be transferred, the name and full address of the financial institution, and the RRSP account number to which the monies are to be transferred.

Transfer of Non-Eligible Retiring Allowance Amounts

The only documentation required to transfer non-eligible retiring allowances to an RRSP without the withholding of income tax at source, is:

a signed letter by the employee certifying that sufficient RRSP room is available; or,
a copy of the employee's latest "Notice of Assessment" from the Canada Revenue Agency (CRA), which will also have to be signed and dated by the employee.

If you wish to personally deposit the money into an RRSP and you want the federal and/or the Quebec income tax waived, you must provide a letter of authorization from CRA and, if relevant, from Revenu Québec (RQ).

Other Termination Payments

Employees residing and working in Quebec will require two tax waivers: one from CRA and one from RQ. All other employees will require only a tax waiver from CRA.

In the request to CRA and RQ you should indicate that the tax waiver request is for a 'Work Force Adjustment'.

Note that the limit is to be taken into consideration as one lump sum; i.e.; you will not receive a separate limit for each different type of payment. One limit only can be used for all retiring allowance payments.

To ensure that the waiver is applied before the payment is issued, you must provide the tax waiver to your compensation advisor by the deadline specified in the options letter provided to you by your department.

Processing of WFA Payments

Compensation advisors are responsible for manually processing the payments.

Any request for information regarding the foregoing should be addressed to your compensation advisor.