Pay Equity And Sex Discrimination

Pay equity led human rights news coverage in 1998. Much of it dealt with the July 29 decision of a human rights tribunal on the complaints of the Public Service Alliance of Canada, or PSAC, against the federal Treasury Board. The decision was the largest human rights ruling ever, affecting as many as 200,000 people and involving large sums of money.

The decision came after years of deliberation and more than 250 days of hearings. In the Commission's view, it provided a fair, well-reasoned answer to the central question before the tribunal: how should the results of a joint union-management study be applied in adjusting the wages of under-valued jobs performed mainly by women? The position ultimately adopted by the tribunal fell between those recommended by the complainant and respondent, leaving room for the parties to negotiate the finer details.

Given the fine balance struck by the tribunal, and the time taken to reach it, the Commission was disappointed when on August 27 the government announced that it would apply for judicial review of the decision.

The debates surrounding these events raised many important issues, including: why do women earn less, on average, than men? How can the value of different jobs be compared? Why does the bill for the tribunal's decision appear to be so high? And how should issues of possible wage discrimination be dealt with?

 

Work, Wages and Women

People's views on pay equity, or equal pay for work of equal value, generally reflect their understanding of how wages are set and why women are so often paid less than men. Some critics of pay equity hold that wages ought to be fixed exclusively by supply and demand, and believe that pay equity interferes with this process. The point of departure for this line of reasoning is not without merit: no one contests the fact that supply and demand play a role in setting wages.

The argument loses a good deal of its persuasiveness, however, when important empirical evidence is considered. Simply put, there is much to indicate that supply and demand are not now, and have never been, the sole arbiters of wages, even in markets where there may appear to be no other forces at play.

The striking consistency in wage differences between specific jobs over extended periods of time indicates that something more than supply and demand is at work. Nurses, for example, have never made as much on average as lawyers, despite the fact that in Canada there have often been shortages of nurses and surfeits of lawyers.

Pay equity, which addresses how these differences have developed, is first and foremost about fairness. It requires that everything included in the work traditionally performed by women be taken into account when their jobs are evaluated. Pay equity is needed because there has historically been a tendency to pay more attention to work traditionally performed by men, and to compensate that work accordingly. Women's work, to which less attention was paid, has been correspondingly under-compensated. In sum, pay equity ensures that when an employer assesses the relative worth of different jobs, fair credit is given to the full range of the actual work performed.

Pay equity is not really different from other public policies that shape the market. The market might operate more freely without a minimum wage, restrictions on child labour, occupational safety rules, or securities regulations. However, the excesses of the Industrial Revolution, the economic hardships caused by the Great Depression and subsequent recessions, and an increasing commitment to basic rights produced broad support for these policies, and legislators decided to take action for the common good. It was a similar concern with the economic disadvantages faced by women - and evidence linking these disadvantages to the way work was valued - that led Parliament to include pay equity provisions in the Canadian Human Rights Act two decades ago.

 

Of Apples and Oranges

Pay equity relies on job evaluation systems to identify and correct wage discrimination. Critics have wondered how such systems can function, trotting out familiar arguments about comparing apples and oranges. But in reality, job evaluation has been a tool of choice for many employers for more than five decades. For example, as technological advances open up new fields of employment, employers are using job evaluation systems to determine where the new jobs should fit in the pay scale.

The evaluation systems are grounded in the common-sense notion that wages for various jobs in an organization should reflect a reasonable and consistent set of considerations. Typically, the considerations used by employers cluster into four areas - skill, effort, responsibility, and working conditions. These are precisely the criteria that the Act establishes for pay equity comparisons.

The job evaluation systems chosen by employers to ensure equitable wages can vary, depending on each employer's values and preferences. If the system is fair, and can be applied consistently, the Commission will accept it.

Probably the greatest challenge is to ensure that a system measures women's jobs as comprehensively as men's. Over the past decade, a keener understanding of steps that help to achieve this has developed, thanks to an increasing store of practical experience and relevant jurisprudence. The Commission has summarized this understanding in its Guide to Pay Equity and Job Evaluation. The Guide has been well received by human resources practitioners, and is available on the Commission's web site.

 

Key Cases, Key Issues

Because pay equity primarily corrects systemic (as opposed to individual or deliberate) wage discrimination, it is most efficiently achieved through cooperation between employers and bargaining agents. This is because they are familiar with an organization's wage structure and internal culture, and can apply these to the evaluation of jobs. For this reason, the Commission always encourages unions and management to consider cooperative pay equity studies, and does what it can to assist such studies where they are under way. But at the same time, a mechanism must be available to ensure that accepted pay equity standards are respected and to step into the breach if insoluble disagreements arise.

This mechanism was created at the federal level when Parliament included equal pay for work of equal value in the Canadian Human Rights Act. By incorporating pay equity into the Commission's mandate, Parliament recognized that it was necessary to have an independent agency to provide advice and impartially examine wage discrimination claims. Similarly, in designating the Canadian Human Rights Tribunal (a separate body) as the forum for binding adjudication, Parliament indicated its preference for having specialized issues addressed, in the first instance, by panels of specialists rather than the courts.

One reason for having independent, specialized bodies is to help ensure that rulings based upon principle can be made, even when they may not be expedient or may provoke strong debate. The tribunal's July 29 decision in the PSAC complaint, to take the most obvious example from 1998, resulted in a great deal of discussion about the cost. Questions have since been raised about the accuracy of various estimates. There have been suggestions that they were too high, given the absence of publicly available data on the people affected, and the likelihood that a significant proportion of any payout would return to federal coffers in the form of income and other taxes.

Nevertheless, there is no doubt that the financial outlay required to comply with the decision is large. The reason for this price tag is not only the number of people affected, but also the aggregate impact of delay. The original pay equity complaint covering federal public service clerks was filed in 1984, and a union-management Joint Study was conducted between 1986 and 1989. The Commission has been warning since the conclusion of the Joint Study that failure to reach a reasonable settlement might prove costly at the end of the day. Had agreement been reached in 1990, years of cumulative costs, interest payments, and lawyers' fees could have been avoided. In fact, the Commission estimates that interest accounts for roughly one-third of the total bill associated with the tribunal's decision.

The evidence adduced in the Public Service Alliance case shows that employees in predominantly female public service occupations have been denied fair pay for a number of years, while time and money have been spent on litigation. Most of the individuals affected are present or former employees in the public service's lowest-paid occupations - people who will continue to earn less than $30,000 a year even after the implementation of the tribunal's order.

The Commission accepts that the government's desire to control costs is legitimate, provided that this can be achieved without violating human rights principles. In this connection, it should be noted that the tribunal ordered that the parties "agree upon the distribution of the aggregate sums of the payout" within one year of the decision. These negotiations would have to be premised on the willingness of all sides to comply with the decision, a development that has yet to occur.

The Commission has long been concerned that the government's approach to its pay equity dispute with the Public Service Alliance may be setting something less than a sterling example for other employers covered by the Act. During 1998, the Commission noted a continuing propensity on the part of some parties to launch procedural challenges in pay equity cases - challenges that inevitably slow down Commission and Tribunal processes, and in so doing illustrate difficulties with the current federal pay equity provisions.

The most visible of these parties was Bell Canada, which persisted in its legal challenge to the Commission's referral to tribunal of complaints alleging that the country's biggest telephone company had contravened the pay equity provisions of the Act - complaints that rest in part on the results of a pay equity study conducted by Bell itself in conjunction with its unions. Citing an array of grounds, Bell has held up tribunal hearings for more than two years with applications for orders quashing the referral. Initially, the company was successful in persuading the Federal Court's Trial Division that the case should not proceed; however, in November 1998, the Federal Court of Appeal overturned the Trial Division's ruling, restoring the Commission's referral. The court's decision confirms that the Commission has broad discretion to decide whether there is sufficient evidence to investigate a complaint and send it to tribunal, that the Commission's processes are fair, and that the Canadian Human Rights Tribunal, not the courts, should be the primary interpreter of the wage discrimination provisions of the Act.

Several other respondents have adopted strategies similar to Bell's. The Government of the Northwest Territories asked the tribunal assigned to its case to declare itself insufficiently independent to proceed with hearings. In December 1998, the tribunal rejected this argument. The territorial government has also gone to court to challenge the way the Commission referred allegations against it to the tribunal. This is the second time the territorial government has filed an application related to this complaint. The first challenge, which was rejected by the Federal Court of Appeal in 1997, questioned the Commission's jurisdiction, and therefore the legitimacy of its investigation. Meanwhile, another large respondent, Canada Post, has proceeded with litigation aimed at forestalling the investigation of complaints against it filed by the Canadian Postmasters and Assistants Association, despite the fact that its initial challenge was dismissed by the Federal Court's Trial Division in 1997.

Finally, in response to a complaint by the Canadian Union of Public Employees, Canada's two major airlines have argued that the wages of flight attendants cannot be compared with the wages of cockpit and ground crews because each set of employees allegedly works in a separate establishment. The Commission has disagreed, noting that this line of reasoning would effectively prevent many employees from obtaining a hearing under the pay equity provisions of the law. Eventually, this preliminary question was referred to a tribunal, which, in a December 1998 ruling, found in favour of the airlines. Concerned about the implications of this ruling, the Commission is participating in an application for judicial review.

Every party to a complaint has a legal right to raise concerns about processes and pursue litigation. However, the delay and expense caused by challenges that turn primarily on procedural rather than substantive questions can be difficult to explain, especially to someone directly affected by the outcome of a case.

 

The Tasks Before Us

Even as public attention focused on the federal public service and Bell Canada cases, the Commission continued to implement its mandate regarding pay equity claims and issues. Complaints were investigated, settlements were encouraged, and advice was given.

One of the Commission's more notable activities in 1998 was the provision of input to the Treasury Board team developing a new job evaluation system for the federal public service. Called the Universal Classification Standard, or UCS, this ambitious and far-reaching system has gender neutrality as one of its stated goals, and is designed to supersede some 72 old classification standards in the course of 1999. The Commission has supported the overall objectives of the UCS, and, since design commenced in 1996, has given feedback from a pay equity perspective on various components of the system. Although it is still too early to comment definitively on whether the system is sufficiently inclusive and balanced, there is little doubt that the UCS represents an improvement over the plethora of standards it is aimed at replacing. The Commission has nevertheless been concerned about the pace of the project - not because it questions the need to move forward quickly, but because it would not want important safeguards or reasonable levels of consultation to be eroded because of inflexible deadlines. The Commission continues to hope that the UCS will be finalized and implemented carefully, so that it contributes to the achievement and maintenance of pay equity in the federal public service.

The pay equity provisions of the Act have done a great deal to encourage attention to issues of fairness in compensation. Without them, Canada would be further behind in meeting its international commitments on wage equality for women.

These provisions, however, have not been updated since the Act was passed in 1977, and for more than a decade the Commission has been calling on the government to consider a pay equity model that would rest less on complaints and more on positive action by employers and unions. Like pay equity legislation in most provinces and the federal Employment Equity Act, revised pay equity provisions should treat patterns of wage discrimination through programs aimed at all employers, with compliance monitored through audits by an independent agency.

The government has signalled its interest in exploring ways of adjusting the pay equity provisions of the Act. As long as the underlying purpose of any proposed amendments is to improve, not dilute, these provisions, the Commission is ready to support an open discussion and to provide thoughtful reflections after two decades in the business.

 

Sex Discrimination

Persistent stereotypes about the role and abilities of women keep them out of certain sectors in which they could make valuable contributions to our society and the economy. Sexual harassment, apart from its sometimes devastating impact on its victims, remains a potent factor in hindering women from remaining in the workforce and advancing professionally.

 

Sexual Harassment

The complaints received by the Commission demonstrate that sexual harassment is a persistent and serious workplace issue, by no means limited to any one sector or employer. One complaint came from a woman employed by a bank who was harassed by a senior manager at an office outing, and later the same evening by telephone. After the incidents, the manager criticized the woman's work and threatened to fire her. When she filed a complaint, she was transferred to another location in a position that was not career oriented. She eventually resigned. The settlement that was reached in this case involved not only compensation to the woman, but also a commitment from the bank to increase its efforts to educate staff, through training sessions, about workplace sexual harassment.

In 1998, the Commission acted to address the issue of sexual harassment more effectively. Writing an anti-harassment policy can be a daunting task, particularly for small employers. Therefore, in cooperation with the Department of Human Resources Development and Status of Women Canada, the Commission prepared model anti-harassment policies for the workplace. Two policies were developed: one for use by medium-sized and large employers, and one for small employers.

 

Employment

One-fifth of all complaints received by the Commission in 1998 involved allegations of discrimination on the basis of sex. A disproportionate number of these involved either women in non-traditional areas of employment, or women who suffered adverse consequences when their employers became aware that they were pregnant.

One complaint came from the sole woman on a list of workers provided by her union for a position on a fishing boat. All the workers ahead of her on the list and several after her were hired. When she asked why she had not been selected, she was told that the company could not permit women on board because the wives of the men would not like it. Another case involved a woman employed by a moving company who wished to be considered for a position in sales and was told that the company did not want a woman in that job. And in fact, only men were interviewed. The women in both of these cases received redress, including financial compensation.

Cases settled in 1998 also illustrate the problems faced by pregnant women in some workplaces. In one case, a woman employed by a transportation company informed her manager that she was pregnant. The manager then became critical of her work. Prior to that time, her performance reports and the manager's oral comments had been positive. Her employment was terminated a few weeks later. As a result of a conciliated settlement, the woman received compensation for lost wages and hurt feelings.

Discrimination is not restricted to entry-level positions. A book published in 1998 by Catalyst, a non-profit organization that has studied the advancement of women into senior corporate and professional positions in the United States and Canada, notes that "many companies have not yet placed the development of female capital high on their strategic priority lists." Advancing Women in Business: The Catalyst Guide describes best practices of corporate leaders. Practices that are common to successful action plans for the advancement of women include having committed senior managers in charge of change, establishing clear accountability, building internal support and awareness through education and communication, and creating benchmarks to gauge results.

One indicator of equality is a comparison between the percentage of women and men at various salary levels. The figures for employees working full time in the federal public service show that as of March 1998, half of the men (51 per cent), but three-quarters of the women (76 per cent) earned less than $45,000 per year. Put another way, one out of every two men earned more than $45,000 annually, as compared to one out of every four women.

The figures for more senior positions reveal a similar pattern. As of March 1998, 20 per cent of men working full time earned $60,000 or more, compared to only seven per cent of the women working full time. Employment equity data suggest that the situation is similar for women in the federally regulated private sector. The figures indicate that there is a need for action such as that identified in the Catalyst report. Women's employment is further explored in the section on employment equity.

 

Integration of Women into the Canadian Forces

In February 1989, a human rights tribunal ordered the full integration of women into the Canadian Forces within ten years. Based in part on studies prepared by the Forces, the tribunal concluded that women's exclusion from combat-related occupations could not be justified on the grounds of operational effectiveness. Over the years, the Commission has endeavoured to ensure that the Forces took the necessary action for full integration to occur. It has had regular contact, in writing and face-to-face, with various Ministers of National Defence and the most senior ranks of the Canadian Forces. It has also assessed the Forces' progress, or lack thereof, in its annual reports.

Initially, there was only limited recognition by the Forces of the need to identify and eliminate systemic barriers. More recently, there have been positive initiatives such as the Army's targeted recruitment plan and the establishment of the Defence Diversity Council, whose mandate includes establishing the strategic framework for the integration of women into the Forces.

But there does not appear to have been a consistent and coordinated effort to ensure that women can both enter combat positions and be accepted in them. As a result, full integration was not in sight by the end of 1998, although February 20, 1999, was to mark the end of the ten years provided for in the tribunal's order. As of January 1, 1998, women accounted for 10.6 per cent of the regular members of the Canadian Forces. However, they still made up only 3.1 per cent of the effective strength of the monitored combat occupations. Only 790 of the 25,482 combat positions were filled by women. This is very little increase from 1989, when one per cent of the combat positions were filled by women. The numbers fluctuate by Command and between officers and non-commissioned members. The least progress, to date, has been made by the Army, which moved from women representing 0.8 per cent of the effective strength of combat occupations in 1989 to 1.6 per cent in 1998. The Navy made the most progress in increasing its proportion of women in combat occupations - from one per cent in 1989 to 5.5 per cent in 1998.

It is not clear whether women will ever be fully integrated unless the Canadian Forces take measures to identify and eliminate barriers to women entering and remaining in combat units, and report regularly on their progress.

 

Women in Prison

A report commissioned by the Correctional Service of Canada, Human Rights and Corrections: A Strategic Model, was released in 1998. Prepared by a working group chaired by a former Chief Commissioner of the CHRC, Maxwell Yalden, the report notes that the best argument for observing human rights rules is not merely that they are required by international convention or domestic laws, but that they actually work better than any known alternatives - for inmates, for staff and for society at large. By preserving fundamental human rights principles within the institutional setting, the odds of eventually releasing a more responsible person are improved.

One of the key recommendations of the Yalden report involved the Office of the Correctional Investigator, which is responsible for investigating activities of the Correctional Service affecting the rights of inmates. This Office is in a unique position to assist in the resolution of individual and systemic problems, but is hampered by the lack of authority to ensure its recommendations are acted upon. The Commission supports the Yalden report's recommendation that, for the few cases in which the Correctional Investigator is unable to obtain a resolution compatible with the Correctional Service's human rights obligations, a process be established by which the matter can be submitted to adjudication through a tribunal or the courts.

The report also noted that while the Correctional Service has implemented many changes to ensure it continues to be responsive to the needs of female inmates, two outstanding issues remain. First, Aboriginal women are over-represented in federal correctional institutions. Moreover, two of every five Aboriginal women are classified as maximum-security inmates, which means that they are not eligible for residence in one of the new regional prison facilities for women. The second issue is the continued incarceration of maximum-security women inmates in prisons for men. The report noted that the "relatively isolated and abnormal conditions of their confinement cannot but have detrimental effects on the women concerned." The report concluded that finding alternative accommodation for these women should be a priority for the Correctional Service in order to meet its human rights obligations.

Independent monitors appointed to report annually for three years on the implementation of cross-gender staffing, which is the use of male correctional officers to guard women, released a report in 1998. The monitors highlighted the lack of a sexual harassment policy for inmates. They noted their concern because women make up the majority of the victims of sexual harassment and sexual assault, and men comprise the bulk of perpetrators. As the monitors stated, "it is important that there be a strong message to all staff that sexual harassment of inmates will not be tolerated, and the clearest way to do this is a separate policy statement." The Commission urges the Correctional Service to put an anti-harassment policy for inmates in place, and to implement it. Incarcerated women, as well as men, have a right to be detained in an environment that is safe from physical, sexual or other forms of abuse or harassment.

 

Complaints

In 1998, the Commission completed work on 319 complaints of discrimination on the basis of sex. Fifty-seven cases were resolved or settled. Forty-eight were referred to alternate redress mechanisms, such as a grievance procedure or an employer's internal complaints procedure. Six cases were referred to the Canadian Human Rights Tribunal for a hearing.

 

Sex Discrimination Complaint Outcomes for 1998

Early resolution: 6
Settled during investigation or at conciliation: 51
Referred to alternate redress mechanisms: 48
Referred to a tribunal: 6
Not dealt with¹: 2
Dismissed for lack of evidence: 27
No further proceedings²: 21
Discontinued³: 158
Total: 319

¹ Cases that the Commission decided not to pursue because they were filed more than one year after the alleged act of discrimination, or were, technically, without purpose.

² Cases in which the complainants withdrew or abandoned their complaints, the matters were outside the Commission's jurisdiction, or the complaints did not warrant referral to a tribunal.

³ Cases that were closed prior to investigation because the complainants did not wish to pursue them or because a link could not be established between the alleged act and a prohibited ground of discrimination.