SHORT TERM DISABILITY PLAN * Short Term Disability benefits for up to a maximum of twenty six (26) weeks;

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1 SHORT TERM DISABILITY PLAN * * Residing outside of the collective agreement Short Term Disability Plan (STDP): Implementation date for September 1, 2016; Short Term Disability benefits for up to a maximum of twenty six (26) weeks; Waiting period for the short term disability benefit is seven (7) consecutive calendar days which are unpaid. The waiting period is waived in cases of hospitalisation. During the waiting period, an employee may use their sick leave credits allotment. If the sick leave credits are insufficient to cover the waiting period, the employee may elect to use vacation lave credits, personal day and/or compensatory leave, if available, as per the applicable collective agreement. Employees who are approved for short term disability benefits, shall receive the following benefits: - During the first six (6) weeks of their illness or injury, excluding the seven (7) calendar day waiting period, 100% income replacement. - Thereafter, income replacement is set at 70% to the end of STDP. Employees can use their top up credits to increase their short term disability benefits to 93% income replacement. STDP Benefit Payment Schedule (in calendar days) Day 1-7 Waiting period* Under the STDP, no income replacement during the waiting period. Employees may use their sick leave credits allotment or, if insufficient, their vacation leave credits, personal day or compensatory leave. Day 8-49 Day If claim is supported by the STDP Administrator, income replacement is at 100% of earnings. If claim is supported by the STDP Administrator, income replacement is at 70% of earnings. Employees may use top up credits to bring income replacement at 93% of earnings. *Waiting period is waived in cases of hospitalisation.

2 Amended Proposal The Employer will also want to discuss any further consequential changes to other provisions in the collective agreement which may be impacted by the changes to the sick leave provision. ARTICLE 35 SICK LEAVE WITH PAY Pre-implementation of the Short Term Disability Plan (STDP), the existing clauses to will be maintained without changes. Proposed New Article Effective September 1, 2016, the date of implementation of the Short Term Disability Plan (STDP), clauses to shall no longer apply and will be replaced by the following: Credits (a) As of September 1, 2016, all sick leave credits accumulated up to August 31, 2016 cease to accumulate and are converted to top up credits on the basis of fifteen (15) hours of accumulated sick leave credits equivalent to one top up credit of 23%. (b) An employee can use his top up credits to increase the short term disability benefits to 93% of income replacement. (c) On September 1, 2018, top up credits banked will be eliminated and any reference to top up credits, and its usage, will be eliminated from the collective agreement On the date of implementation of the Short term Disability Plan, an employee will be allocated sick leave credits, as follows: (a) An employee will be allocated forty-five (45) hours of sick leave credits on the first day of each fiscal year. (b) Allocation of sick leave credits under will be subject to the deduction of any sick leave credits previously advanced prior to the implementation of the STDP. (c) Interim measure due to the date of implementation of the STDP: Since the implementation date of the STDP occurs later than the first day of the fiscal year, the allocation of sick leave credits will be pro-rated based on the number of days remaining in the fiscal year.

3 (d) An employee appointed for a specified term of employment shall receive a pro-rated amount of sick leave credits, to a maximum of forty-five (45) hours, based on the length of their term employment and their normal assigned weekly hours of work. (e) If an employee begins their employment in the core public administration during the fiscal year, their sick leave credits, to a maximum of forty-five (45) hours, shall be prorated based on the number of days remaining in the fiscal year. (f) Carry-over of sick leave credits: (i) (ii) Indeterminate employees and term employees of greater than six (6) months can carry over a maximum of fifteen (15) hours of sick leave credits remaining at the end of the fiscal year, for use in the following fiscal year. For greater certainty, an employee may not have more than sixty (60) hours of sick leave credits at any time in a fiscal year An employee shall be granted sick leave with pay when he or she is unable to perform his or her duties because of illness or injury provided that: (a) he satisfies the Employer of this condition in such manner and at such time as may be determined by the Employer; and (b) he has the necessary sick leave credits Unless otherwise informed by the Employer, a statement signed by the employee stating that, because of illness or injury, he or she was unable to perform his or her duties, shall, when delivered to the Employer, be considered as meeting the requirements of paragraph 35.03(a) When an employee is granted sick leave with pay, and injury-on-duty leave is subsequently approved for the same period, it shall be considered, for the purpose of the record of sick leave credits, that the employee was not granted sick leave with pay Where, in respect of any period of compensatory leave, an employee is granted sick leave with pay on production of a medical certificate, the period of compensatory leave so displaced shall either be added to the compensatory leave period if requested by the employee and approved by the Employer, or reinstated for use at a later date.

4 Explanatory Notes Short Term Disability Plan The Short-Term Disability Plan (STDP) will reside outside of the collective agreement. Eligibility Employees appointed to an indeterminate position (full or part-time) or a term greater than six (6) months would be eligible on the date they are appointed. Employees appointed to a term of six (6) months or less and later appointed to: - another term of six (6) months or less would become eligible on the date the employee has completed six (6) months of continuous employment; - a term of more than six (6) months would become eligible on the date they are appointed to the term of more than six (6) months; or - an indeterminate position would become eligible on the date they are appointed to the indeterminate position. Seasonal employees would become eligible after being continuously employed for a period of at least six (6) months. Waiting Period Except in the case of hospitalisation, all employees are subject to the waiting period. An unpaid waiting period would apply before an employee could access STDP benefits. During the waiting period, an employee may use sick leave credits, if insufficient, vacation leave credits, personal day and/or compensatory leave may be used. The waiting period is seven (7) calendar days and not seven (7) working days. For a regular employee working from Monday to Friday, the seven (7) calendar days would represent five (5) working days. Income Replacement Employees approved for STDP benefits would receive 100 percent income replacement for the first six (6) full weeks of illness, following the waiting period (except in cases of hospitalisation). Income replacement would be set at 70 percent starting on week seven (7) and continue through to the end of the STDP period. The maximum length of the STDP benefit period would be twenty-six (26) weeks or one hundred and eighty-two (182) calendar days. There is a seamless connection for income replacement between the STDP and the Long-Term Disability (LTD). Case Management Case management will be administered by a third-party service provider, to be procured through a competitive bidding process. The third-party service provider will provide adjudication and case management support. Departments will be responsible for providing income replacement for all STDP claims approved by the third-party service providers.

5 Employees who are ill/injured for more than seven (7) calendar days may apply for benefits under the STDP. If approved, the employee would receive active and early case management, rehabilitation, and return-to-work support. Employees who are hospitalised may immediately apply for benefits under the STDP. Case management would include initial adjudication and ongoing monitoring of an employee's illness/injury and functional capabilities.

6 Explanatory Notes Sick Leave Language Proposed amendments to the collective agreement The accumulation of sick leave credits would end upon the implementation of the Short Term Disability Plan (STDP), September 1, Forty five (45) hours of annual sick leave credits would be provided to every employee on the first day of each fiscal year, based on a thirty-seven decimal five (37.5) hour work week. Sick leave credits would be used to cover unexpected illness/injury or the Short Term Disability Plan waiting period. Employees can carry over a maximum of fifteen (15) hours of sick leave credits remaining at the end of the fiscal year, for use in the following fiscal year. Employees may not have more than sixty (60) hours of sick leave credits at any time in a fiscal year. Accumulated sick leave banks will be maintained and used as top up credits for income replacement for two (2) years beyond the STDP implementation date. Legacy sick leave credits are converted to top up credits on the basis of fifteen (15) hours equals a top up credit of 23% income replacement. Top up credits can be used to increase short-term disability benefits to 93% income replacement (70% + 23% = 93%). Top up credits and its usage would be eliminated on September 1, On September 1, 2016, the sick leave credits will be prorated based on the number of days remaining in the fiscal year. Sick leave credits would be pro-rated for employees who begin their employment after the first day of the fiscal year and for employees with a term employment.

7 Sick Leave and Short Term Disability Plan Key Features of the Employer s Proposals Context The current system is old and has not kept up with the times. As a result Federal Public servants often do not enjoy protection available to many other public and private sector employees. While many provinces and other employers have moved on to short term disability plans, we remain with a system that provides for 15 days of sick leave, no short term disability plan, and a long term disability plan that kicks in, only after 13 weeks. While having 15 days a year and the ability to accumulate may seem like a good plan, the numbers show a very different, and alarming, portrait. - 25% of our employees have less than 2 weeks of banked sick leave - 65% of our employees do not have 13 weeks of banked sick leave Should these employees be faced with a serious illness requiring 2-3 month of absence, they could be without income replacement support and would have to rely on E.I. - In FY , 33,500 employees have had at least one sick leave episode of more than 5 consecutive days, and - When that happened, they were away for an average of 24 days. - In more egregious cases, 6500 employees 75% of them women and 50% under the age of 45 - had to take leave without pay for an average of 40 days. The current system does not provide assistance to employees to facilitate their return to work once they are ready. - Employees need to exhaust all their sick days and be on long term disability insurance to have access to case management and return to work plans. - If they have a recurring illness, their situation is even worse. Once any assistance is provided, it is often very late, if not too late. As we know, re-insertion in the work place once an employee has gone for 6 months or longer is difficult and sometimes, near impossible. The Employer s proposal with respect to sick leave and short term disability is specifically targeted at solving those issues. We propose 6 days of sick leave, to be used to offset the waiting period. If insufficient, employees can use other forms of leave to cover them. They can then access a short term plan which provides for secured income, until they become eligible for the long term disability plan. Whether employees have 1 year or 25 years of service, an accumulated bank or not, it does not matter, they can be covered. They will not be left to fend for themselves, as a case manager will be assigned to them and assist until the employees are back to work, fully recovered. And those employees who have accumulated sick leave bank can use them to top up their income replacement, once it goes to 70%. The following is a more technical description of the provisions we propose to discuss with all Bargaining Agents, with the view to come up with a mutually agreeable plan, one that will

8 protect our employees, your members, adequately. Proposed Amendments to the Collective Agreement The accumulation of sick leave credits would end upon the implementation of the Short Term Disability Plan, September 1, Forty-five (45) hours of annual sick leave credits would be provided to every employee on the first day of each fiscal year, based on a thirty-seven decimal five (37.5) hour work week. Sick leave credits would be used to cover unexpected illness/injury or the Short Term Disability Plan waiting period. Employees can carry over a maximum of fifteen (15) hours of sick leave credits remaining at the end of the fiscal year, for use in the following fiscal year. Employees may not have more than sixty (60) hours of sick leave credits at any time in the fiscal year. Accumulated sick leave banks will be maintained and used as a top up credits for income replacement for two (2) years beyond the STDP implementation date. Legacy sick leave credits are converted to top up credits on the basis of fifteen (15) hours equals a top up credit of 23% income replacement. Top up credits can be used to increase short-term disability benefits to 93% income replacement (70% + 23% = 93%). Top up credits and its usage would be eliminated on September 1, On September 1, 2016, the sick leave credits will be prorated based on the number of days remaining in the fiscal year. Sick leave credits would be pro-rated for employees who begin their employment after the first days of the fiscal year and for employees with a term employment.

9 Eligibility Proposed Short-Term Disability Plan Components Employees appointed to an indeterminate position (full or part-time) or a term greater than six (6) months would be eligible on the date they are appointed. Employees appointed to a term of six (6) months or less and later appointed: o To another term of six (6) months or less would become eligible on the date after the employee has completed six (6) months of continuous employment. o To a term of more than six (6) months would become eligible on the date they are appointed to the term of more than six (6) months; or o To an indeterminate position would become eligible on the date they are appointed to the indeterminate position. o Continuous Employment means employment for six (6) months with no break in employment for seven (7) or more working days. Seasonal employees would become eligible after continuous employment for at least six (6) months. Waiting Period A waiting period would apply before an employee could access STDP benefits; The waiting period for non-occupational illness/injury would be seven (7) consecutive calendar days. Income Replacement The maximum length of the STDP benefit period will be 26 weeks, or 182 calendar days; Employees approved for STDP benefits would receive 100 percent income replacement for the first six (6) weeks of illness/injury, following the unpaid waiting period; Income replacement would be set at 70 percent thereafter, through to the end of the STDP period; There will be no restrictions on the number of claims. Employees would be able to file and could be eligible to receive STDP benefits for approved claims, as and when needed. Case Management For supported claims the employee would receive assistance such as : o Enacting early and active case management; o Providing ongoing identification, coordination and facilitation of assessment and treatment services for employees; o Identifying functional job capabilities, restrictions or limitations; o Offering return-to-work planning and coordination of support services; o Addressing employer and/or employee non-compliance; and o Ongoing communication regarding the case and return to work plans with employees, employers and other stakeholders (e.g. Disability Management Advisors, Human Resources, etc.).

10 Return-to-Work / Accommodation Plans Based on information from the employee, attending health professional, and supervisor, a return-to-work plan/reasonable accommodation measures may be established to help the employee recover and return to work. It would be the Service Provider s responsibility to bring the employee, employer and physician together to develop a return to work plan or reasonable accommodation measures that supports the employee s recovery. The employee may choose to include their bargaining agent representative in these discussions. The employee, the employer, and the attending physician would all need to agree with the proposed return-to-work/reasonable accommodation plan. The return-to-work plan/accommodation measures could include but not limited to altered hours of work, modified work duties, or other alternative accommodations. Adjudication of Claims The STDP Provider would adjudicate claims to determine if the applicant is Totally Disabled as per the STDP definition. If supported, the employee will receive STDP benefits; if non-supported, the employee could appeal the decision. As part of the adjudication process, the Service Provider would be responsible for: o Contacting the employee to provide and request the completion and submission of the Claim Application Form in either paper or electronic format; o Adjudicating and manage claim submissions, related appeals, and provide case management services; o Providing ongoing communication of claim decisions to the employee, supervisor and appropriate official within the employee s department, Separate Agency or Participating Employer; o Administering the STDP benefit according to claim adjudication, ongoing disability management intervention, and return to work planning; and o Provide the plan sponsor with standard and ad hoc reports if so necessary. Appeals Employees would have the right to appeal claim decisions. A total of three levels of appeal are proposed with the initial two levels conducted internally, by the Service Provider, and the third conducted by an external body. o Level I: employee would have ten (10) calendar days from the date of the non-supported claim decision letter to provide written notice of appeal. This appeal would be conducted by the Service Provider but by an official other than the one who made the initial decision (e.g. by a more senior case manager); o Level II: if Level I appeal is denied the employee would have ten (10) calendar days from date of appeal decision to provide written notice of a second appeal. This appeal would be conducted by the Service Provider but an official with more experience than the one who reviewed the initial adjudication or ensuing appeal (e.g. by a case manager supervisor); o Level III: employee would have seven (7) calendar days following date of Level II appeal decision to provide written notice of a third appeal. This final appeal would be handled by a designated external review body to the Service Provider.

11 Employee pay would continue in the form of provisional STDP benefits until the final Level II appeal decision is rendered. Pay reconciliation would occur to recover any benefits paid if the final appeal is maintained of the initial non-supported decision. o Failure to provide written notice of appeal within ten (10) calendar days will result in the termination of the Provisional STDP benefit. Employees must also submit any additional information supporting their claim within 30 calendar days, unless extenuating circumstances can be demonstrated. Short-Term Disability Plan (STDP): administration The STDP would be sponsored by Treasury Board for employees in Departments, Separate Agencies, and Participating Employers designated by Treasury Board. The STDP would be self-insured and for administrative services only (ASO). That means, the Service Provider would provide claims adjudication, case management, return-to-work services and data reporting. Income replacement for the STDP would be funded by departmental salary budgets (i.e. Vote 1) on a pay-as-you-go basis. Third-party claims adjudication would be centrally managed by TBS and paid for by departments. Key Definitions Totally Disabled: an employee in a continuous state of incapacity due to a diagnosed illness or injury which prevents them from performing the essential duties of their regular occupation or employment, with or without accommodations. Attending Health Professional: a physician, psychiatrist or dentist qualified to diagnose an illness/injury and determine and/or provide medically necessary treatment, as well a nurse practitioner who provides treatment if the employee resides in a location where diagnosis and/or treatment by a physician is not readily available. Waivers The waiting period is unpaid but could be waived in certain circumstances: o Hospitalisation: admittance to a hospital or a private health care facility as an in-patient or out-patient for medically necessary procedures or treatment. Admittance: the formal registration and acceptance by a hospital or private health care facility of a patient who is to be provided room, board, and continuous nursing services for a minimum of 24 hours. Out-Patient: a patient who enters the hospital or private health care facility for the medical treatment and leaves after the treatment. Other Income Any income obtained as part of approved rehabilitation services will not be offset (reduced) unless those earnings exceed 100 percent of pre-disability earnings. STDP benefits would be offset if income is obtained from other sources, including: o Benefits payable under any Workers' Compensation program (where permitted by law) or damages received for income and/or wage loss replacement through a court or settlement agreement in lieu of pursuing a WCB claim; o Benefits paid for lost wages from no-fault government insurance or automobile insurance (where reduction is permitted by law);

12 o Where the employee is in receipt of Employment Insurance sickness benefits and becomes in receipt of STDP benefits, employees must report these benefits to the EI program; and o Earnings from other employment, unless the employee can prove the employment predated the injury/illness. Such employment must not prevent or delay rehabilitation or recovery as determined by the Service Provider. Filing STDP Claims In the event that an employee has no sick leave days available and cannot report to work due to illness or injury, they will inform their supervisor about their absence. Supervisor will input the employee sick leave status in the HR system. If the employee is expected to be absent for more than seven (7) calendar days or stays sick for more than 7 days, the HR system will inform the third-party Service Provider. The Provider will then open a case file and appoint a case manager who will contact the employee to give information about the STDP and provide the Claim Application Form. The employee would complete Part 1 of the Claim Application Form and their Attending Health Professional would complete Part 2. Any incomplete Forms will be considered as pending file and if correct forms are not submitted within 10 days of reporting illness/injury, the case file will be closed and benefits denied, unless extenuating circumstances are demonstrated. Pensions When in receipt of STDP benefits at 100 percent, employee contributions under the public service pension plan would continue to be deducted at source. When in receipt of STDP benefits at 70 percent, employees would not be required to pay contributions, until they return to work. Employees would have the option to voluntarily pay the required pension contributions during 70 percent benefit period. Consistent with the current pension plan, employees would have the option to not count the period after the first three months as pensionable service. Other Benefits Coverage While on an approved claim the employee would maintain pre-disability coverage under the following: Public Service Health Care Plan; Public Service Dental Care Plan; and the applicable Long-Term Disability Plan. Employee contributions and/or premiums that would normally apply for such leave period would continue to apply (e.g. for Hospital III coverage). Benefits coverage will not be affected during periods where an employee is in receipt of STDP income replacement. Conditions of Receiving Benefits The employee must meet the following conditions to continue receiving STDP benefits. Benefits may cease if any of these conditions are not met: o Be considered Totally Disabled under the STDP; o Be under continuous care of an attending health professional licensed to practice medicine in Canada or where the employee resides and works;

13 o Maintain contact with the STDP case manager and supervisor; o Follow a customary and reasonable treatment program as recommended by the attending physician; o Participate in independent medical examinations, as and when requested; o Participate in a rehabilitation program including return to work plans; o Not work for wages or profit while receiving disability benefits, unless as part of an approved rehabilitation program by the STDP Provider; and/or, o Obtain written approval from the STDP Provider before leaving Canada while receiving disability benefits. Exclusions STDP Plan benefits would not be payable for the following: o Occupational illness or injury, unless a provincial WCB has denied the claim; o Any disability due to the commission of, or attempt to commit, an assault or other criminal offence for which a conviction has been found; o Injury or illness directly from participation in a public confrontation, riot, insurrection or civil disorder, unless related to essential work duties; or o Direct or indirect disability resulting from intentionally self-inflicted injuries, unless related to a recognized mental disorder. Injury-On-Duty-Leave IODL would be aligned with the STDP benefit levels. There would be no waiting period and employees would be entitled to IODL with 100 percent income replacement from the initial day of absence, up to 42 calendar days. If a WCB decision is not rendered within 42 days the employee would receive 70 percent income replacement until the WCB decision. o If accepted by the provincial WCB, the employee would be transferred and receive wage loss benefits as per provincial legislation; o If denied, the illness or injury would be treated as a non-occupational claim and employees would apply to the short-term disability plan. If the provincial wage loss benefits are less than 70 percent, the employer would top the employee up to the 70 percent income replacement rate.