This summer, the Interim Pay Equity Commissioner (the “Commissioner”) denied a request by the Treasury Board of Canada Secretariat, on behalf of the Treasury Board as employer (the “Treasury Board”), for authorization to establish three distinct pay equity plans for employees in the core public administration (the “CPA”). This decision confirms that it is only in exceptional cases, and where supported by evidence rather than speculation, that such requests will be granted by the Commissioner under the federal Pay Equity Act (the “Act”).
The Treasury Board employs over 250,000 employees in the CPA, the vast majority of whom are represented by one of 16 certified bargaining agents. As an employer, it is subject to the rules and requirements of the Act.
Under the Act, the establishment of multiple pay equity plans may be authorized as an exception to the rule requiring employers to create a single plan for their whole workforce. That being the case, the Treasury Board elected to propose the establishment of three separate plans for the CPA:
- Plan 1, which would contain only one bargaining agent – PSAC,
- Plan 2, which would also only contain one bargaining agent – PIPSC, and
- Plan 3, which would contain the remaining 14 bargaining agents as well as all of the CPA’s non-unionized employees.
The Treasury Board accordingly applied under the Act to request authorization from the Commissioner to proceed with the establishment of the proposed plans. As the requesting party, the Treasury Board bore the burden of not only satisfying the threshold question of whether there were enough predominantly male job classes in each of the proposed plans to allow for a comparison of compensation, but also of demonstrating that the proposed plans were appropriate to proactively redress systemic pay-based gender discrimination and to achieve pay equity in the workplace.
Of the 16 bargaining agents, five made submissions objecting to the Treasury Board’s application for multiple pay equity plans (PSAC, PIPSC, CAPE, AJC, and ACFO), and a further four advised that they supported the submission from ACFO.
At the first stage, the Treasury Board was able to satisfy the threshold question, with the Commissioner accepting that there would be enough male comparators in each of the proposed plans to allow for a comparison of compensation to be made to predominantly female job classes. As a result, the Commissioner’s decision turned on whether the proposed plans would be appropriate in the circumstances.
In her decision, the Commissioner set out several guiding principles for analyzing the appropriateness of multiple plans, as detailed in her earlier decision Canadian National Railway Company and Unifor, United Steelworkers, International Brotherhood of Electrical Workers, and Teamsters Canada Rail Conference – Multiple Plans (December 8, 2022) (the “CN Decision”):
- There are no fixed categories in which multiple plans will be appropriate and each application turns on its merits,
- The impact multiple plans will have on reinforcing occupational gender segregation is an important consideration, and
- It is crucial to assess whether the proposed multiple plans will proactively redress systemic pay-based gender discrimination in the workplace.
In support of its application, the Treasury Board raised six grounds based on which it argued the proposed plans were appropriate in the circumstances and should be authorized. With the guiding principles from the CN Decision in mind, the Commissioner addressed each of these grounds individually in her decision:
1. Will a single pay equity committee be extremely challenging and require a significant amount of dispute resolution?
First, the Treasury Board argued that developing multiple pay equity plans would be most effective due to the size and composition of a single committee for the entire CPA (i.e., minimum of 18 members, including representatives from the employer, the bargaining agents, and the non-unionized employees), as well as the contentious and protracted nature of multilateral negotiations.
The Commissioner found, however, that the Treasury Board had not substantiated its claim that the proposed approach would decrease the need for dispute resolution. In fact, she noted that the bilateral nature of the committees for Plans 1 and 2 would mean that any disagreement would result in a tie vote and a “matter in dispute” in need of resolution under the Act. She contrasted this with the situation of a single committee, where the employer’s vote would prevail in the event of any disagreement between the employee representatives, leaving only those situations where there is a tie vote in need of dispute resolution. The Commissioner concluded that the Treasury Board’s speculation that a single large committee might be challenging or require the parties to resort to dispute resolution mechanisms available to them under the Act was insufficient to override the Act’s presumption of a single plan.
2. Is a single plan likely to significantly increase the time required to implement proactive pay equity?
Second, the Treasury Board stated that three pay equity plans would take less time to negotiate than a single plan given the challenges it raised with respect to a single committee in its first argument.
With respect to this argument, the Commissioner held that the Treasury Board had not presented any compelling evidence that the three committees it had proposed would actually be able to create three plans more quickly than a single committee could. She noted that the same number of jobs would still need to be evaluated and that there were ways in which that work could be distributed to different individuals or subcommittees, even within a single committee.
3. Will a single job evaluation tool lead to decreased accuracy and reliability of pay equity results?
Third, the Treasury Board claimed that using a single job evaluation tool for the entire CPA might lead to decreased accuracy and reliability of pay equity results.
The Commissioner determined, however, that the Treasury Board had not satisfactorily explained how the problems of accuracy and reliability resulting from the heterogeneity of the CPA would be addressed under its proposal. She therefore could not conclude that three plans would result in greater accuracy and reliability than a single plan.
4. Will a single pay equity plan lead to decreased acceptance of results?
Fourth, the Treasury Board took the position that a large, single committee might lead to a lack of employee acceptance of the pay equity plan, resulting in complaints contesting the plan.
The Commissioner rejected this argument, finding that it was speculative. She asserted that employees were at least as likely to reject the results of a process that departed from the requirements of the Act as they were to reject one created using the mechanisms of the Act.
5. Will a single plan contradict the existing community of interest structure and cause disruption in current labour relations?
Fifth, the Treasury Board submitted that the Act effectively creates a second mechanism for wage-setting in the CPA that is distinct from collective bargaining. In its view, developing a single pay equity plan would disrupt labour relations and contradict the existing community of interest structure.
The Commissioner held, however, that the Act consciously disrupts collective bargaining and that, as a result, that disruption was not a justification to deviate from the requirements of the Act. She did not accept that the Treasury Board’s proposal would align the pay equity exercise with the existing community of interest structure given the way bargaining units were grouped under the proposed plans (i.e., with labour relations alignment for only two of the 16 bargaining agents – PSAC in Plan 1 and PIPSC in Plan 2). She also did not accept that its proposal would decrease disruption to future rounds of collective bargaining with those bargaining units.
6. Is developing a single plan for an employer as large and complex as TBS unprecedented?
Finally, the Treasury Board asserted that the development of a single pay equity plan for a workforce of the size and complexity of the CPA was unprecedented. It referenced both the requirement under Ontario’s Pay Equity Act and the option under Quebec’s Pay Equity Act to establish multiple plans in some situations involving certified bargaining agents.
While accepting that a single plan of the magnitude required for the entire CPA was likely unprecedented, the Commissioner noted that the Joint Union Management Initiative (or “JUMI”) pay equity exercise undertaken in the 1980s produced a significant number of comparative value decisions over a two-year period. In that way, she stated that the JUMI exercise did achieve its purpose of producing gender bias free evaluations for a large and complex workplace. In her view, the fact that a single plan for the CPA might be unprecedented did not necessarily mean that the multiple proposed plans were appropriate in the circumstances.
In her decision, the Commissioner also addressed concerns raised by the bargaining agents with respect to the gender neutrality of the Treasury Board’s proposed pay equity plans. Although she acknowledged that the Treasury Board had met the relatively low threshold for establishing that there would be enough male comparators in each of the proposed plans, she indicated that the role that multiple plans would have in reinforcing occupational gender segregation remained an important consideration in the determination of whether the proposed plans would be appropriate in the circumstances.
In the end, the Commissioner concluded that the Treasury Board had not demonstrated that the proposed plans, structured as they were, would be gender neutral and would not reinforce occupational gender segregation. In fact, she found that the proposal risked replicating gender segregation in the CPA.
In Our View
As noted earlier, this decision confirms that it is only in exceptional cases that requests for authorization to establish multiple pay equity plans will be granted by the Commissioner under the Act. Although this may make it challenging for employers to secure approval for multiple plans, this decision also confirms that employers are not required to establish a single committee or to attempt to create a single plan as a prerequisite to being permitted to apply for the necessary authorization from the Commissioner.