In Canadian Union of Public Employees Local 1999 v. Lakeridge Health Corporation (“Lakeridge Health”), the Divisional Court of Ontario upheld two decisions of the Pay Equity Hearings Tribunal (the “Tribunal”), which found that the Pay Equity Act (the “Act”) does not require the harmonization of wage grids.
The concept of “pay equity” in Ontario is not defined in the Act, but according to the Pay Equity Commission, it means equal pay for work of equal value. Equity is achieved in the Act by requiring that employers harmonize “job rates”—defined as the highest rate of compensation for a job class—between female and male job classes.
The central issue in both cases before the Tribunal, and in the Lakeridge Health case before the Divisional Court, focused on the fact that it takes longer for women in female job classes to get to the highest rate of pay than it does for men in comparable male job classes. The unions argued that this was gender discrimination and constituted a violation of the Act.
In Lakeridge Health, the Divisional Court heard applications for judicial review from both cases that were before the Tribunal. The first involved Lakeridge Health Corporation and CUPE Local 1999. CUPE Local 1999 represents a bargaining unit of clerical/office employees (the majority of whom are female) and a unit of service employees (the majority of whom are male). In 12 female job classes in particular, the job rates have been equalized as compared to similarly valued male job classes, but the employees are subject to a fixed wage grid of pay raises, and it takes longer for women to reach the top rate than it does men. Men in the service unit can reach the top pay rate after nine months of service, while it takes 24 months of service for women in the clerical unit to reach the same top rate of pay. In practical terms, this means that the men are making more money quicker than the women.
The second involved the York Region District School Board and CUPE Locals 1734 and 1196. Local 1734 represents a unit of clerical and technical employees (the majority of whom are female), and Local 1196 represents a unit of custodial employees (the majority of whom are male). Employees in the female job class reach the top pay rate after three years, while the employees in the male job class need only one year of service to reach the top rate of pay for that class.
Before the Tribunal, the unions argued as follows: the Act requires the compression of wage grids, not just job rates, so that men and women in comparable male and female job classes achieve pay equity throughout their employment, not just when they reach the top rate of pay. The unions argued that it constituted discrimination for the Act to permit men to earn more money quicker as compared to women in similar job classes.
However, the Tribunal disagreed. It held that the Act defines achievement of pay equity in terms of the top rate of pay, not harmonization of wage grids. On judicial review, the Divisional Court determined that the Tribunal’s decisions were reasonable in light of the legislation. In practical terms, this means that by law it is permitted for employees in male job classes to earn more money faster in comparison to their counterparts in female job classes.
However, recognizing this problem in the legislation, the Divisional Court opined that this might open the door for a future Charter challenge. Justice Swinton, for the Court, wrote at paragraph 80:
“The Tribunal correctly, in my view, characterized the unions’ argument as an attack on the underinclusiveness of the PEA—that is, a complaint that the PEA does not do enough to eliminate gender-based wage discrimination. Clearly, the legislature, in enacting the PEA, made a number of policy decisions about the way in which to achieve pay equity, enacting legislation that does not eliminate all systemic wage discrimination. As a result, the PEA may be vulnerable to a challenge under s. 15 of the Charter because of that underinclusiveness.”