Union members claim provider's mistakes were emotionally and financially damaging
After a five-year relationship, portrayed as problematic by an Alberta union, payroll and benefits provider Telus Sourcing Solutions (TSSI) has been served with a $50-million class-action lawsuit.
Two employees of the Calgary Health Region filed the suit on behalf of 4,000 members of one of the region’s unions, the Health Sciences Association of Alberta (HSAA). They said the provider made a litany of mistakes — such as faulty pension contributions, overpayment of wages and T4 errors — that meant they suffered from mental stress, frustration, extra expenses and damaged relationships.
“You would be challenged to find anywhere in Canada the level of payroll errors that have impacted on the daily lives of these health-care workers,” said Scott Pattison, Edmonton-based communications officer for the HSAA. “These things translate into extremely dire situations on occasion, such as people not being able to make mortgage payments.”
However, TSSI said the lawsuit is without merit and while there were errors, they have been quickly remedied and the provider’s service is “world-class.”
TSSI was contracted to take over a variety of HR services for the Calgary Health Region in 2004, including payroll, benefits administration, recruitment, sourcing, occupational health and safety, disability management, health assessments and systems work, said Larry Spagnolo, president of TSSI in Vancouver.
“They had the need for a more sophisticated HRMS system, they only had a payroll system that was unsupported,” he said. “They also wanted to make sure they had a very disciplined environment and were able to control the costs, so this was the solution.”
When TSSI first started to work with the region, which is now in the process of becoming part of the Alberta Health Services (AHS), it took on about 170 employees to work for the provider.
But when the PeopleSoft system was first turned on, about 3,500 employees were overpaid, admitted TSSI. And various agreements and clauses in the collective agreements allow the employer to recoup the money, either in the next pay or over months and years.
“That was the more significant issue that we had,” he said. “If I look at the industry and PeopleSoft implementations, we were able to stabilize this in a fairly short period of time.”
There are always glitches when implementing such a large, complex system as PeopleSoft, said Shawn Hall, Vancouver-based spokesperson for Telus. Last year, TSSI had to execute 700 programming changes in the system after two collective agreements at AHS were signed. The accuracy rating on those changes was 99.5 per cent, he said, while the provider’s overall accuracy rating is 99.9 per cent.
“When you’re dealing with tens of thousands of employees across complex collective agreements in a system where nothing short of 100 per cent is acceptable — and you’re never going to achieve that because there’s always going to be human error — you’re going to run into challenges and the key is how you address them,” said Hall.
But prior to contracting out to TSSI, the in-house system experienced “completely negligible” mistakes that were comparable to other regions in the province, said Pattison. With the new PeopleSoft system, the service has “been rife with errors,” he said.
“It’s completely mind-boggling, to say the least, they would publicly state they have a 99.9-per-cent accuracy rating,” he said.
And the situation is not isolated, he said, as the Calgary Board of Education has also had members complaining of ongoing issues with employment records and payroll services.
Minutes from a January board meeting detail complaints — such as incomplete payroll reports, disconnects in the transfer of information and a failure to process time sheets in a timely manner.
There are thousands of ongoing problems and TSSI is the one that has caused all the problems, said Clint Docken, principal with Calgary-based law firm Docken & Co., which is representing the health-care workers.
Previously, the service was fine, he said.
“We don’t know why they’re having these problems.”
As further evidence of their dissatisfaction, the HSAA and two other provincial unions sought signatures from members earlier this year asking AHS to end the 15-year service contract with TSSI — they ended up with 4,000 names. (Bruce Conway, spokesperson for AHS, said the matter is before the courts so the organization is not willing to comment.)
But that initiative has not done any good and there have been no appreciable improvements to the service, said Docken. An Environics Research Group report conducted on behalf of Telus polled the health-care workers, finding 13 per cent reported both “wrong payments” and “overtime was not paid or wrong” in 2008. The study also stated 36 per cent of the workers graded TSSI’s performance as “poor” in 2008.
“The 99.9-per-cent payroll accuracy allegation made by TSSI leaves me mystified when their own independent studies show much different figures,” said Docken. “Both TSSI and Alberta Health Services, the government body that contracted out payroll services in the region, continue to ignore the serious problems impacting these dedicated health-care professionals.”
But TSSI has taken several initiatives to improve relations, said Spagnolo, such as monthly meetings with members to discuss concerns, an extended-hours call centre for payroll and benefits questions (which took 250,000 calls from AHS employees in 2008) and a rigorous service level agreement to ensure all inquiries are tracked.
At press time, TSSI was coming up with an appropriate challenge to the claim, he said.
“I really don’t want to speculate as to why they’re going this far,” said Spagnolo. “I know that, based on our service record and based on our track record, we are very confident that we deliver a world-class service.”
