Chapter II – Implementing the Act

Part D: HR Authorities

General Intent of the Legislation

In 1999, Treasury Board, acting under the authority of the Financial Administration Act and the Public Service Staff Relations Act, was responsible for the human resources management framework governing federal departments. This included authority for the organization and classification of jobs, compensation, collective bargaining, terms and conditions of employment, policies covering most aspects of human resources management, and related delegation instruments and recourse except in the areas of recruitment and staffing. Treasury Board also set the framework for human resources data management and, with Public Works and Government Services Canada, prescribed the requirements for pay administration. In addition, Treasury Board provided general direction in the area of human resources planning. As a government department, all of these provisions applied to the former Department of National Revenue.

The Public Service Commission of Canada, operating under the Public Service Employment Act, set the requirements for external recruitment and internal staffing and managed the system of recourse related to staffing matters. The Commission had responsibility for executive resourcing and shared responsibilities with the Leadership Network and the Canadian Centre for Management Development for the development of executives.

The Canada Customs and Revenue Agency Act set aside all of this and, in some of the most important provisions in the legislation, allowed for the creation of a tailor-made human resources management regime. These provisions underpin the CRA’s ability to provide responsive, innovative service that address the particular requirements of administering the Agency’s program legislation as well as the special work-related needs of its employees. Note, however, that the CRA—like the former Department of National Revenue—continues to be subject to the Official Languages Act, the Employment Equity Act, the Access to Information Act, the Privacy Act, the Canadian Human Rights Act, and Part II of the Canada Labour Code dealing with health and safety.

General Human Resource Authorities

Statutory Provisions

Section 50 of the Canada Customs and Revenue Agency Act designates the CRA as a “separate employer” under the Public Service Staff Relations Act. Section 51 gives the CRA general powers of personnel management and the authority to determine terms and conditions of employment. The same section details the authority of the CRA to determine its personnel requirements and allocate and determine the use of its human resources; to set requirements for training and development; to classify jobs and employees; to determine pay, hours of work, and leave; to provide awards for outstanding performance and meritorious achievement; to establish standards of discipline and related processes including penalties such as suspension and termination of employment; and to determine reimbursements for travel and other expenses.

Implementation

Immediately on proclamation of the Act, the Commissioner assumed full responsibility for the organization and classification of jobs at all levels and for establishing the recruitment and staffing programs and policies, and a staffing recourse system. The Agency also assumed the separate employer role with respect to collective bargaining, staff relations, and compensation matters. The transfer of employees went smoothly and without disruption to daily operations. The CRA also immediately implemented transitional human resources policies and processes approved by the Board of Management. CRA implemented a new Agency Learning Strategy. These policies have been reviewed, updated, and approved by the Board of Management, as required, and have served the Agency well.

Some of the more salient of the policies and actions that have been approved by the Board of Management to implement the above statutory authorities are described below.

Classification Reform

Using its new classification authorities, the CRA immediately took action to begin designing a classification system to better suit its business requirements. As a first step towards a reformed classification system, the Board of Management approved the new Agency occupational group structure in March 2000. Once fully implemented, this will result in a reduction in the number of occupational groups from 32 Treasury Board Secretariat groups to 7 groups in the Agency. The full implementation of the framework is a multi-year undertaking involving consultations with major stakeholders, including senior management and employee representatives (Public Service Alliance of Canada (PSAC), Union of Taxation Employees component (UTE), PSAC Customs Excise Union Douanes Accise component (CEUDA) and The Professional Institute of the Public Service of Canada (PIPSC)) and continues to be a work in progress.

As part of this framework, the CRA implemented in March 2002 the Management/Gestion (MG) Group for supervisory and managerial jobs. This classification effort represented a major initiative on the part of the Agency. Given the size of the Agency’s workforce and the managerial challenges it faces on a daily basis, the implementation of the new Management group was designed to underscore the important role managers carry out as team leaders and change agents in the context of providing service to Canadians. The MG Group integrated jobs from 19 occupational groups into a single cohesive network of some 3,000 managers. In 2003, the Agency initiated the development of a new classification standard for the Program Delivery and Administrative Service (SP) occupational group, which covers approximately 75% of CRA employees. However, the work has been temporarily put on hold as a result of the departure of Customs to the new Canada Border Services Agency. The review of the classification standards for some of the other CRA groups will also be undertaken as part of the Agency’s long-term classification reform plan.

The Agency also restructured the Executive group (EX) to include a new level of Senior Management (SM) to which 227 positions were converted on March 1, 2001. With the largest information technology (IT) community in the Public Service, the CRA faced unique managerial challenges and introduced a distinct EX-1-IT classification level in order to address long-standing classification anomalies.

As of March 31, 2004, there were 289 EX positions, 45 EX-1-IT positions, and 161 SM positions for a total of 495 jobs in the Executive cadre, which is 1.12% of the employee population of 44,300 during peak periods of operation. It should be noted that the CRA has one EX for every 129 employees, compared with the Public Service average of one EX for every 39 employees.

Performance Management and Accountability

In assuming its new HR authorities, the CRA recognized that it had to establish an environment promoting strong accountability for the management of human resources and the corporate values of integrity, professionalism, respect, and co-operation.

Accordingly, in April 2000, the Employee Performance Management policy was approved by the Board of Management. The policy’s objective is to support and strengthen organizational and individual performance, through the establishment of performance expectations, the identification of measurement criteria, the provision of performance feedback, and the development of action plans to address performance issues when necessary. The approach links the performance expectations of managers and employees to the corporate mandate, organizational objectives, and business and work plans. As the program takes root, performance management is being progressively linked to specific job competencies.

In recognition of the significant management challenges facing the Agency, the Board of Management modified the Pay at Risk program of the core Public Service to include additional pay at risk of up to 5% based on “effective people management” for all EX and SM group members. Performance pay or leave to reward “effective people management” was also introduced for the Management Group through collective bargaining.

Some 33,000 performance assessments are now completed for the workforce annually excluding newly appointed employees, those on leave, and terms under three months. Learning is also linked to the performance management process. As of 2004, over 30,000 managers and employees had individual learning plans.

In 2000, the Board of Management also introduced a new, non-monetary recognition approach, which decentralizes the delivery of employee recognition closer to the working level and allows managers and employees to acknowledge significant achievements made by Agency employees.

Staffing and Recourse

Statutory Provisions

Section 53 gives the CRA, in the person of the Commissioner, the exclusive right to appoint employees. Under section 54, the CRA is required to develop a program to govern staffing, including the appointment of, and recourse for, employees. The section excludes staffing from the collective bargaining process.

Implementation

Staffing

The Board of Management approved staffing principles, policies, and programs as part of the package of CRA policies that went into effect the moment the CRA was established in November 1999. They replaced the staffing principles, policies, and programs that operated under the aegis of Treasury Board and the Public Service Commission. The principles, which were developed with the involvement of the staff of the Public Service Commission, embrace the concepts of representativeness, transparency, competency, fairness, efficiency, adaptability to particular organizational needs (for example, evolving mandates, new program responsibilities), productivity (in the sense of placing the right number of competent people in jobs necessary for the successful functioning of the CRA), and non-partisanship (employee conduct and staffing activities that are free of political or bureaucratic influence). The Staffing Program and the Staffing Delegation and Accountability Agreement that were put in place ensure that staffing is conducted in accordance with the Agency’s staffing principles and values. In turn, the principles are reinforced within the Code of Ethics and Conduct that was also approved by the Board.

The CRA has endorsed the concept of competencies as the pivotal principle and common denominator for ensuring the right people are in the right job at the right time to deliver quality services to Canadians. Selection decisions are also based on competencies. A catalogue of required competencies was developed with significant input from managers, employees, and HR specialists to ensure their relevancy to business requirements. The Board of Management approved the CRA’s competency policy in March 2002.

The CRA has also introduced pre-qualification processes in staffing to establish pools of employees who have met the competencies of CRA jobs, paving the way for increased efficiency in staffing. The competency assessment results for employees that are obtained through pre-qualification processes are portable and durable for ongoing use in staffing. As the number of pre-assessed and pre-qualified employees grows, selection processes are taking less time. In building its pre-qualified process, the CRA is placing emphasis on the most frequently staffed positions where efficiency gains will have the most impact, for example, auditing, programme administration, and information technology jobs. Once the pre-qualification process has reached full maturity, competency assessment results will be fully integrated with performance management, the identification of training and learning needs, and job and career management.

At the Executive group and Senior Management levels, where there are 220 candidates prequalified for appointment at a higher level, this approach has dramatically reduced the time key leadership positions remain vacant. Since January 2000, the percentage of Executive group selections completed in less than three months has almost doubled, and there are routine examples of appointments completed within 28 to 35 calendar days – a major improvement in the time such appointments took under pre-Agency status.

Staffing Recourse

Section 54 of the CCRA Act authorizes the Agency to develop a staffing recourse program for employees. As of November 1, 1999, the CRA introduced a new program predicated on a more active and participative role for managers and employees. Its objectives were to provide the opportunity for individuals to raise concerns and have them addressed or corrected in a timely manner and to ensure that individuals have access to feedback on their developmental needs.

There are three forms of recourse available depending on the nature and the significance of the staffing decision in question: individual feedback, decision review, or an independent third party review. Proactive dialogue between management and employees is promoted as key to resolving problems as close as possible to the parties involved. The CRA’s recourse approach strikes a balance between rights-based and interest-based approaches to resolving complaints and is supported by the alternative dispute resolution training provided to managers and employees. The Agency’s competency framework provides a common language for the parties to use in discussing selection requirements.

As a result of this new process, staffing recourse has been transformed from an adversarial and defensive process into one where openness and dispute resolution practices predominate. This has had a positive effect on the time spent on recourse within the Agency. Prior to 1999, the average time to complete an internal competitive process was 166 days excluding recourse. Recourse could frequently add anywhere from 3 to 12 months to the selection process due to the size of CRA’s competitions, the number and complexity of selection processes being managed, and the scheduling of related appeal process activities.

In the first year of the Agency, the time to staff a position through internal staffing (including recourse) was reduced by 33% and by 20% for external staffing. Since November 1, 1999, there have been only 211 requests for independent third party review of Agency staffing decisions. This equates to 1.3% of placement decisions.

Staffing and Recourse Accountability

Statutory Provisions

Section 55 provides mobility rights between the CRA and the Public Service both to Agency employees and to public servants under the Public Service Employment Act (PSEA). It also provides for the Public Service Commission, in consultation with Treasury Board, to set terms and conditions on the mobility of Agency employees to positions under the PSEA if it determines, in exercising its Section 56 authorities, that the principles governing the Agency’s staffing program are incompatible with those under the PSEA.

Section 59 requires that after its first three years of operation, and periodically after that, the CRA commission an independent assessment of its recourse measures and publish a summary of that assessment in its annual report to Parliament.

Implementation

The Public Service Commission and Treasury Board have not found it necessary to exercise the authority set out in Section 55, that relates to deployments. As a result, Agency employees continue to have mobility for the purposes of appointments and deployments within the wider public service. In its annual reports to Parliament, the PSC has reported positively on the Agency’s staffing principles, their compatibility with these under the PSEA, and their application.

As required under section 59, the Agency commissioned an independent external auditing firm, Deloitte & Touche, to complete an assessment of recourse mechanisms it has implemented. The resulting report concluded that “Staffing has struck a reasonable balance between efficiency and fairness in its process”.

In addition, the report stated that the recourse system the Agency had put in place represents a best practice as it supplements existing rights to recourse with optional avenues that are often more cost-effective and that can have the effect of resolving more fundamental, underlying problems than is typically the case with traditional rights-based recourse.

Labour Relations and Collective Bargaining

Statutory Provisions

Section 58 gives the CRA exclusive right to establish collective agreements with bargaining units made up of CRA employees, but it is required first to consult with Treasury Board on its human resources plan, including the “total increases in employee salaries or benefits.”

Implementation

When the Agency came into being, existing benefits and the pension plan continued, and the CRA adopted most of Treasury Board and Revenue Canada staff relations and compensation administrative policies until such time as they could be reviewed to reflect the values and principles of the new Agency.

However, separate employer status meant that some 25 National Joint Council directives covering topics such as health and safety, travel and relocation, and the bilingualism bonus no longer applied. In consultation with the unions, these were replaced with CRA policies. The Agency has also continued to work on tailoring other labour relations policies to its needs, including a Code of Ethics and Conduct, as well as policies on discipline, preventing and resolving harassment, hospitality and other benefits, and telework.

Collective Bargaining

In March 2001, the Board of Management approved a compensation policy to guide the new approach to collective bargaining. To attract and retain qualified employees in a competitive labour market, the policy commits the CRA to providing compensation to our employees in line with that provided elsewhere. The CRA, using a bargaining unit structure aligned with its occupational group structure, has successfully negotiated five collective agreements with its two bargaining agents without significant labour unrest. In December 2004, a third collective agreement was ratified with Agency employees represented by PSAC, following a work stoppage in the fall.

The Agency has consulted with Treasury Board on its human resources plan as required by the Act. The collective agreements negotiated by Treasury Board and CRA have been similar with regard to the major elements. At the same time, however, the Agency has negotiated specific provisions that respond to its special needs, including performance pay or performance leave, terminable allowances for senior auditors in the Greater Toronto Area (to help address attrition and retention issues), payment of annual professional fees, and preretirement leave for employees aged 55 with 30 years of pensionable service.

The Agency has consulted with the unions representing its employees throughout the development and implementation of new human resources policies and programs. Consultation agreements exist with each union, and there are active union-management consultation committees at the national, regional, and local levels. The CRA has committed to the use of alternate dispute resolution principles in the union-management relationship at all levels, and it continues to maintain good working relationships with the unions.

In 2003-2004, the number of grievances relating to staff relations issues decreased by more than 2,600 or about 44%. This decrease can be partially attributed to agreements with the unions regarding the procedures for the filing of mass grievances.

Technological Improvements and Service Delivery Renewal

Technology is the backbone for most of CRA’s HR modernization initiatives that focus on simplifying HR administration and transactions, implementing Agency-specific HR procedures and systems, putting needed information close to the users and enabling them to update and access information through self-serve applications.

CRA set the stage for improved HR planning and analysis and the modernization of its HR processes by significantly upgrading its HR data management and reporting capacity. The Agency invested in the design and implementation of the HR component of the new Corporate Administrative System (CAS) which was implemented nation-wide in a relatively short time. This has put CRA on an enterprise-wide footing where linked financial and HR information improve the management of resources.

In the spring of 2002, the Board of Management gave approval for the modernization and streamlining of the way in which CRA pays its employees. The Compensation Service Delivery Renewal initiative provides for simplified pay procedures and delivers national services to employees through self-service options and call centre technology. Full implementation, which features consolidation options for 27 service delivery sites, will result in significant efficiencies and savings.

Group Insurance and Benefits

Statutory Provisions

Section 52 authorizes the CRA to enter into group insurance and benefit arrangements, sets related terms and conditions, and exempts these arrangements from the operation of the Financial Administration Act.

Implementation

While this provision is consistent with its agency status, the CRA has chosen to date to continue with the Public Service group insurance and benefit arrangements.

Official Languages and Employment Equity

In the areas of official languages and employment equity, the Agency, as noted earlier, is governed by the Official Languages Act and the Employment Equity Act respectively. Because these two areas are so central to human resource management, it was deemed appropriate to also include them in this report.

Official Languages

The official languages program promotes a workplace conducive to using both official languages with an emphasis on respect and collaboration, supported by knowledge of rights and responsibilities regarding official languages. The Agency set in place a three-year plan for the renewal of official languages. The plan includes an innovative system of quality management for official languages that is designed to better meet requirements for language of work and communication between Headquarters and the bilingual regions. This system already applies to nearly 3,000 employees in the Agency, and is being adopted by the Canada Border Services Agency and Citizenship and Immigration Canada.

Service to the public, Part IV of the Official Languages Act, has become an integral part of CRA business. It is monitored from both the public satisfaction level and organizational capacity improvement perspectives. There is also an important linkage made with Part VI, which addresses participation of English-speaking and French-speaking Canadians, and Part VII on the advancement of English and French.

Continuous improvement regarding the active offer of bilingual service is supported by a variety of information and learning sessions as well as initiatives such as cross-regional partnerships and developmental exchanges of staff. Business outreach and partnerships with targeted language minority communities, associations, and businesses are continuing in different areas of the country.

Members of the CRA’s Executive cadre must reflect the linguistic duality of Canada and be representative of the Canadian population. Executives in regions that are bilingual for purposes of language of work and all assistant commissioners must meet high levels of second language proficiency. As of March 31, 2004, 96% of the executives in the EX-1 to EX-5 levels met the bilingual requirements of their positions; all others were either on language training or had a language training plan. The performance agreement regime for the Executive and Senior Management levels includes “official languages obligations” as one of the special commitment options which underlines the importance the Agency places ensuring a fully bilingual senior cadre. An Official Languages component is also fully integrated into the curriculum of the MG program and formed part of performance agreements for that group beginning in 2004-2005.

Employment Equity

In order to meet its obligations under the Employment Equity Act, the Agency has developed a multi-year employment equity plan, the “Strategic Direction for Employment Equity”. As a result of its influence, progress on employment equity representation continues to be strong across the CRA as can be seen in the following figure.

Figure 1: Employment Equity Representation Levels Below the Executive Group

The following figure displays employment equity representation in the Executive group, where steady progress has also been made since the creation of CRA.

Figure 2: Employment Equity Representation Executive Group

Between November 2001 and December 2003, the Agency’s progress has also been confirmed by the Canadian Human Rights Commission. It undertook a compliance review of the Agency’s employment equity program. The Commission found the program to be in full compliance with all 12 statutory requirements of the Employment Equity Act.

Assessment of the HR Provisions

The CRA’s transition to separate employer status and the introduction of a new human resources regime are a notable success story. Guidance from the Board of Management has resulted in the implementation of policies that integrate innovative private sector practice within a public service context, and, as a result, the CRA is today in the vanguard of HR reform in the Public Service of Canada.

The first major accomplishment was transitioning Revenue Canada’s large workforce into the alternative service delivery model, which underlies the creation of the Agency, smoothly and without disruption. In 1999, managers, employees, and their unions were not familiar with the ASD working environment and concerns abounded. The CRA has engaged its staff in the transition through large-scale consultation and the establishment of HR regime design teams. As a result, a sense of commitment to the new organization emerged and paved the way for a successful transition.

The CRA has involved staff, unions, and management in modernizing its HR approaches and has led a large organization to endorse philosophical, cultural, and methodological changes in effective people management.

A notable achievement was the introduction on November 1, 1999, of an Agency-specific staffing and staffing recourse program built on nationally endorsed competencies and responsive to the evolving business needs. Over the course of the last five years, this has been combined with a conflict management and alternative dispute resolution capacity that allows the Agency to move away from a more adversarial and litigious recourse environment.

The CRA’s staffing decisions uphold the traditional public service principles of non-partisanship, representativeness, fairness, and transparency. In addition, they are guided by the principles of adaptability, competency, efficiency, and productivity that were recommended and endorsed by the staff in joint workshops focused on providing optimum service to Canadians.

From a labour relations perspective, the CRA achieved much. As of November 1, 1999, it had replaced the essential employer policies that could not be carried forward into the Agency ASD environment. Early in the transition, the Agency exercised its collective bargaining responsibilities and guided the organization through the Public Service Staff Relations Board certification process for the establishment of the new bargaining agents that would represent CRA employees.

The CRA also made significant improvements in the way it manages HR information in support of HR planning. It also implemented electronic communication tools that better serve its managers and employees from self-help electronic tools to improved electronic learning tutorials and knowledge-sharing Web sites that helped support its cultural change.

The CRA has also enhanced its management capacity by recognizing the significance of effective and ethical leadership in ensuring the quality of its work environment. The changes have had a beneficial impact upon the way in which management and employees interact. This is perhaps best evidenced in the results of two employee surveys: one was completed in 1999, the year the Agency was created, and the other in 2002. As can be seen from the figure that follows, employees have become more satisfied with their work environment over the past few years, a result the Agency believes speaks well of how it has implemented the HR authorities it received.

Figure 3: Indicators of Effective Communication with Immediate Supervisor

This is not to say that all aspects of our HR regime changes are yet fully implemented or embraced to the same degree by all stakeholders. Several components of the Agency’s new regime represent multi-year undertakings that require time to fully mature. Others build on cultural changes so fundamental that they will only be fully implemented after the first five years of operation.

In refining its new HR programs, the CRA will give priority to addressing any issues identified through management reviews and studies, achieving full alignment with its future business directions and realizing the full enabling potential of the new regime. It is rapidly moving, for example, to further refine its staffing approaches, to continue the streamlining of classification processes, and to strengthen HR performance measurement, training, and communications relating to the new recourse mechanisms.

The CRA is also working to more fully integrate the components of its new HR regime at the operational level. Developing the talent of its teams and leaders will remain at the heart of the HR renewal strategies, as well as advancing and measuring the efficiency, effectiveness and performance of its HR programs and services. It will continue to work closely with management teams and employee representatives on its change management initiatives.

Much has been accomplished in human resources in the Agency in a relatively short period. A testament to the progress it has made is evidenced by the fact that its expertise is sought in all areas of HR management by other organizations in the public service. It has been an active participant in assisting the core Public Service in the development of its overall modernization legislation and agenda. Many of the changes endorsed in the Public Service Modernization Act mirror changes that were already in place at the CRA. Central agencies have recognized the CRA as a pathfinder in HR reform, and it will continue to willingly assist by sharing its modernization experience.