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UNW Collective Agreement

Article 49 - Deferred Salary Leave Plan

49.01 The deferred salary leave plan enables employees to take six months or one year of leave from the Public Service and to finance this leave through a deferral of salary in previous years.
49.02 Under this plan, participating employees agree to defer a portion of their salary for four or four and one half consecutive years and the Employer agrees to grant the employee leave in the fifth year or the last six months of the fifth year, and to use the amounts deferred in the previous four or four and one-half years to pay the employee's salary during the period of the leave.  Participation in the plan is subject to operational requirements.
49.03 During the period of leave, employees may engage in whatever activities they wish except work for the Public Service.
49.04 The individual plan for each participating employee is a six year period consisting of the following:
  (1) (a) The first four consecutive years during which the employee draws 80% of salary earned in each of the four years and defers the remaining twenty percent (20%);
    (b) The fifth consecutive year in which the employee takes the leave, and is paid from the amounts deferred above; and
    (c)

The sixth consecutive year in which the employee returns to employment with the Public Service of the Northwest Territories for a minimum of one year;

or,

  (2) (a) The first four consecutive years and six consecutive months during which the employee draws 90% of salary earned in each of the four years and six months and defers the remaining 10%;
    (b) The last six consecutive months of the fifth consecutive year in which the employee takes the leave, and is paid from the amounts deferred above; and
    (c) The first six consecutive months of the sixth consecutive year in which the employee returns to employment with the Public Service of the Northwest Territories for a minimum of six months.
49.05 Participation can begin at any time during the year.
49.06 There is no maximum number of employees allowed to enter the plan.
49.07 Deputy Heads ensure that approved leaves do not impair the future operation of their Department.
49.08 Employees make written application to their Deputy Head. Applications should state the proposed start of the salary deferral and the proposed period of leave.
49.09 The Deputy Head reviews the application and the requirements of the Department and notifies the employee and the Department of Human Resources at least six weeks prior to the start of salary deferral.
49.10 Each participant will sign an agreement covering the details of the plan.
49.11

In each year of the plan preceding the period of the leave, the employee will be paid 80% or 90% of the applicable salary. The remaining 20% or 10% of salary will be deferred and this amount will be retained in trust by the Employer to finance payments during the period of leave.

49.12

The deferred salary will be placed in a trust fund by the Government and any returns on the investment of the trust will be paid to the participant at the end of each calendar year.

  (a) The money held in trust will be pooled with other Government funds and the employee will be credited with the average rate of return on those funds.
  (b) Investments will be restricted to those eligible under Section 57(1) of the Financial Administration Act.
  (c) A statement of the individual's account will be provided to each participant for the end of each calendar year.
  (d) Interest earned will be reported on the participant’s T-4.
49.13

During the period of leave, the participant shall receive, if on a one year leave, one twenty sixth or, if on a six month leave, one thirteenth of the amount deferred plus any trust fund returns in each pay period, less applicable deductions. No additional payments to the participant can be made such as loans, subsidies, allowances or salary.

49.14 Income tax will be deducted in accordance with the provisions of the Income Tax Act and its Regulations.
49.15 During the first four or four and one-half years of the plan, the Employer shall provide employee benefits at a level equivalent to 100% of salary.  Benefits and premium recoveries for the period of leave will be governed by the rules for Leave Without Pay.  All benefits cease except Public Service Health Care Plan, superannuation, supplementary death benefit, disability insurance, and dental coverage. Premiums for these plans are payable by the employee. Arrangements can be made to have deductions from pay for some of these benefits.
49.16 Upon return from leave, the Department will, wherever possible, place the employee in the position held at the commencement of the leave.  Where this is not possible, the employee will be placed in an agreed upon equivalent position. If the employee's position is deleted from the establishment while the employee is on leave, the employee will be entitled to the same rights and benefits had the employee been in the position when it was deleted.
49.17 Returning employees will have their salary review date moved in accordance with 24.10(c).
49.18 The Employer shall cancel participation in the plan and shall refund, within 60 days, the total of the deferred salary plus earnings from the plan, if the employee dies or employment is otherwise terminated.
49.19 Where operational requirements would not be met if the employee proceeded on leave in the fifth year, or where exceptional changes in personal circumstances make the leave unfeasible, the Employer will give the employee the choice of the following:
  (a) withdrawing from the plan and taking a refund of the total in the deferred salary account; or
  (b) deferring the period of leave to either the sixth or seventh consecutive year or to some other mutually agreeable time.
49.20 Upon withdrawal from the plan the total in the account will be repaid to the employee within 60 days of the notification of withdrawal.