Australian case similar to Phoenix pay debacle wasn’t on government’s ‘radar’
Senior government officials Marie Lemay, right to left, Alfred Tsang and Ryan Pilgrim hold a technical briefing at the National Press Theatre in Ottawa on Wednesday, Oct. 5, 2016. THE CANADIAN PRESS/Sean Kilpatrick
A government pay system fiasco in Australia that caused problems similar to what the Canadian government is experiencing now was not on the Department of Public Works’ radar when the contract with IBM was being signed, according to Public Works Deputy Minister Marie Lemay.
IBM won a lawsuit in April this year launched by the Queensland state government in 2013. Queensland was asking for damages after the 2010 implementation of Queensland Health’s new payroll system ended with a $1.2 billion price tag and resulted in thousands of health workers getting overpaid, underpaid or not paid at all — problems echoed in the rollout of the IBM Phoenix system here.
In that lawsuit, the state argued IBM misrepresented its credentials for delivering the payroll system. The state lost and had to pay IBM’s legal fees; it had also waived its rights to sue the firm in a prior agreement it signed. A 2013 inquiry found the problems with the system were partly the fault of public servants who didn’t manage it properly.
In a briefing for journalists Wednesday, Lemay said Wednesday that when the Canadian government started the tendering process, the Australian case “was not really on the radar.”
“The situation in Australia started about at the same time as we were at the end of the process of selecting the firm,” she said.
She said she wouldn’t draw comparisons between the two payroll disasters.
“Whether it’s the exact same case or not, I wouldn’t want to go down that road.”
Lemay said the department looked at the U.S. and a number of other countries when assessing the pay system.
The Canadian government’s Phoenix pay system problems have plagued thousands of public servants with a wide range of employee pay issues — including getting paid improperly or not at all.
The move to the Phoenix system was planned under the Harper government but rolled out in February under the Liberals — which has led to partisan sparring over which administration is at fault.
Asked if the Queensland case ruling explains why Canada hasn’t launched a legal battle over Phoenix, Lemay said there’s no reason to do so and insisted the government would “not be influenced by something else as to whether or not we’d entertain any court challenge.”
“We have no reason to sue IBM right now,” she said. “IBM is respecting its contract and they’ve been good partners. They’re still with us. When we find issues that have to be corrected they’re right there and correcting it.”
The Public Service Alliance of Canada has blamed the technology for the pay problems, while Lemay has cited other causes, including an existing system backlog and training issues combined with a steep learning curve for the new system.
At a previous briefing, Lemay said that IBM has been working with the government doing 24/7 tech support for payroll problems, and would only face penalties under the contract if that tech support is not properly carried out. She said the department would address root causes and lessons learned after the fact, but is currently focused on stabilizing the pay system.
Meanwhile, Lemay said Wednesday they’re still on target to clear the backlog of employees not being paid properly by the end of the month, but added she expects new cases of payment errors to keep cropping up afterward. Lemay said some 38,000 pay cases have been cleared from their backlog so far.