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Auditors transferred from B.C. credited with provincial years of service for purposes of severance pay

The Federal Court of Appeal has upheld a decision of an adjudicator ordering the CRA to give auditors transferred from the B.C. provincial government full credit for their years of service with the province when calculating severance pay. The auditors transferred to the CRA as part of the HST harmonization project in B.C. When the harmonization project was cancelled following a provincial referendum, many of the transferred auditors chose to remain with the CRA.

Under the collective agreement between PIPSC and the CRA, at the time the accrual of severance pay was eliminated in 2012, employees of the CRA had the right to cash out their accrued severance entitlement based on years of “continuous employment”. Despite promising the transferred auditors that their transition to the CRA would be seamless, and despite entering into an agreement with PIPSC that their “service” with the province would be recognized, the CRA refused to count their provincial years of service when the transferred auditors asked for their severance entitlements.

“Continuous employment” was defined as “periods of service in the public service, as defined in the Public Service Superannuation Act”. Although it was common ground that the B.C. provincial government was not included in the definition of “public service”, because a Pension Transfer Agreement was in place with the B.C. government allowing the transferred auditors to count their provincial service for pension purposes, the Court of Appeal found that the adjudicator reasonably concluded that the meaning of “continuous employment” was ambiguous. This allowed the adjudicator to then consider extrinsic evidence in determining the mutual intent of the parties. Given the agreement entered into between PIPSC and the CRA ensuring that provincial service would be recognized, and in light of other representations made by the CRA, the Court of Appeal concluded that the adjudicator reasonably determined that the years of service with the province was part of their “continuous employment” for purposes of determining their entitlement to severance pay.


Publish Date: 19-MAY-2016 10:45 AM