PSAC claims Ottawa bypassing negotiated processes, undermining union's role as bargaining agent
The federal government’s early retirement incentive program for public servants has prompted formal labour complaints from the Public Service Alliance of Canada (PSAC), which alleges Ottawa is bypassing negotiated processes and undermining the union’s role as bargaining agent.
In complaints filed with the Federal Public Sector Labour Relations and Employment Board and reported by CBC/Radio‑Canada, PSAC is asking the government to “cease the unilateral implementation” of the program until its terms are negotiated with the union, CBC reported. The board is an independent tribunal that handles disputes over collective bargaining and alleged unfair labour practices.
According to the report, roughly 68,000 civil servants over the age of 50 were invited late last year to check their eligibility for the incentive. The federal government has forecast the program will cost $1.5 billion over five years, with about half of that amount expected in 2026, CBC reported.
Government 'bargaining directly' with PSAC
PSAC argues that by offering separation packages directly to employees to reduce headcount, the employer is “bargaining directly with PSAC members on terms and conditions of employment” and “circumventing” the workforce adjustment provisions embedded in collective agreements. The union characterises this as “interference” with its statutory role and says it has been excluded from the design and rollout of the program.
In its complaint, the union states that it has been “left with no way to explain to its members how the program will be rolled out or implemented in conjunction with the existing workforce adjustment process.” It further alleges that “by placing the Union in this position, [the government] is actively undermining its role as a bargaining agent and causing members to perceive the Union as uninformed and ineffective.”
PSAC also contends that the early retirement incentive “has the same objectives and general design” as the workforce adjustment regime negotiated into collective agreements and says the government is breaching its duty to maintain existing terms and conditions of employment while collective bargaining is underway for certain groups.
Lawyers warn of limited information for employees
Labour lawyer Marc Boudreau, who reviewed the complaints, told CBC the announcement of the program likely “shocked” the union and that PSAC “has been sidelined” and “is losing face a bit” as a result. He added that the government “doesn’t seem to know where it’s going with this program either,” with full details expected only once the federal budget receives royal assent, according to CBC.
To support its case, PSAC has filed its current bargaining proposals on workforce adjustment, including a call to increase the education allowance for affected employees from $17,000 to $25,000.
By December 2025, Ottawa was in the process of sending information about the voluntary early retirement program to nearly 70,000 employees, according to the report.
However, labour lawyer Malini Vijaykumar told CBC that even legal counsel representing several federal public sector unions have limited information about the incentive’s exact terms. “It’s been this program that’s been sort of dangled, I guess, in front of workers, and there’s just not a lot of clarity on it,” she said.
Vijaykumar described the initiative as a “significant incentive” for some public servants nearing retirement who are concerned about potential layoffs and said PSAC appears worried that members could be “making these decisions without full knowledge of the terms” of the program. She expects the labour board to prioritise complaints of this type but warned it could still take months before a decision is issued.
Budget 2025 marks a significant shift in the federal government’s approach to public sector management, with plans to reduce the size of the federal public service by about 40,000 positions — or 10% — by 2028-29.
