Federal union files grievance over early retirement incentive for public servants

Canada’s largest public sector union says the federal government’s offer of early retirement is violating collective agreements. CTV’s Katie Griffin reports.

Canada’s largest public sector union has filed a policy grievance over the federal government’s offer of early retirement packages to thousands of public servants, saying it circumvents “key obligations under our collective agreements.”

The Canada Strong Budget 2025, released in November, outlined a plan to cut the size of the federal public service by 28,000 positions by 2029, including 12,000 employees and 350 executive positions cut through attrition and early retirement packages.

• Latest information on federal public service, including notices, job cuts, return to office rules and more

In December, approximately 68,000 early-retirement notices were issued to federal public servants.

The Public Service Alliance of Canada (PSAC) confirmed to CTV News Ottawa it has filed a policy grievance over the early retirement incentive (ERI) program to the Federal Public Sector Labour Relations and Employment Board, and is urging the government to suspend issuing early retirement notices.

“We support any effort to prevent involuntary layoffs, but those efforts must be negotiated, lawful, and protect workers’ rights. No one should ever be pressured into giving up hard-won protections,” PSAC said in a statement Sunday evening.

“The government botched the launch of this program. They rushed it out without consulting the union, before full details were available, and without properly explaining workforce adjustment rights.”

The union says while it does not oppose early retirement options for federal public servants, any policy to prevent involuntary layoffs “must be negotiated, lawful, and protect workers’ rights.”

“The employer’s actions circumvent key obligations under our collective agreements,” PSAC said.

“We’re calling on the employer to stop issuing ERI notices until it fully complies with workforce adjustment obligations and consult with the union before taking any further steps.”

PSAC national president Sharon DeSousa told CTV News the collective agreement already has a workforce adjustment appendix, which allows for pension waivers.

”As it stands, introducing an early retirement incentive – no one knows what that means. How it’s going to impact,” DeSousa said.

“No one has seen any wording on it. No one has seen any wording on it. And so why are you creating something new that’s going to impact them when, in the collective agreement, you have something that’s clear and transparent that has been mutually agreed on by the employer and the union.”

DeSousa wants the federal government to conduct consultations with employees and the union.

The federal budget outlined the government’s plan to amend the Public Service Superannuation Act and the Income Tax Regulations to offer a voluntary early retirement incentive program through the public service pension plan.

“Eligible employees would be able to apply to retire with an immediate pension based on years of service with no reduction for early retirement,” the government’s website said.

“Where an application is approved, the annual pension amount would be calculated using the total years of pensionable service up to the early retirement date. Pensionable service refers to the period during which the employee contributed to the public service pension plan.”

According to the government’s website, the program is “not yet available” and will be implemented once the budget legislation comes into force.

The government says employees would need to meet the following eligibility criteria to be eligible.

Group 1: Members who joined the public service pension plan on or before Dec. 31, 2012, and who:

• Are at least 50 years old
• Have at least two years of pensionable service
• Have at least 10 years of employment in the public service

Group 2: Members who joined the public service pension plan on or after Jan. 1, 2013, and who:

• Are at least 55 years old
• Have at least two years of pensionable service
• Have at least 10 years of employment in the public service

According to the government, the application window will be within 120 days of the legislation coming into force. Approved employees will have to retire within 300 days of the legislation coming into force.

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