Canada Loses Pay Equity Appeal, Owes Billions

October 19, 1999 5:11 PM EDT

By Randall Palmer

OTTAWA (Reuters) - The Canadian federal government lost an appeal Tuesday of the biggest pay equity case in Canadian history, a decision that could eventually force it to pay out C$5 billion to 200,000 workers, mostly women.

The decision would require payments to government employees in female-dominated jobs that are deemed not to be paid as well as male-dominated jobs.

If implemented immediately, the decision could swallow up much of Ottawa's expected budget surplus this year, but the government still is able to appeal to two more court levels and put off a resolution for at least another two or three years.

The union that took the government to court, the Public Service Alliance of Canada (PSAC), urged the federal government to pay up and asked for an immediate meeting with the minister concerned, Treasury Board President Lucienne Robillard.

``There is no longer any reason for further delaying pay equity,'' acting union president, Nycole Turmel, told a news conference.

``They have to pay. They have to recognize the rights of these workers, and they have to stop delaying the process.''

Possibly the largest pay equity case in world history, it would require pay adjustments back to 1985 that the union said would average C$30,000 per affected employee.

No one was accusing the government of paying men and women differently for the same job. Instead, the case compared female-dominated jobs, secretaries and clerks, for instance, with male-dominated ones such as sailors and tradesmen.

Robillard reaffirmed the Liberal government's commitment to the principle of pay equity but said she needed a few days to analyze the decision and to consult. She hinted she may want to return to the negotiating table.

This drew the scorn of the leader of the leftist New Democratic Party, Alexa McDonough.
``This government supports the pay equity principle as long as it doesn't have to treat women as equals, as long as it doesn't have to pay any money,'' she told Parliament.

On the right, the Reform Party asked whether this would spell the end to meaningful tax relief.

``The government has known for years that they were going to face this day of reckoning,'' Reform's Monte Solberg declared. ''Does it mean that taxpayers are on the hook? I suspect so.''

Robillard said every year the federal budget has a contingency reserve. Finance Minister Paul Martin does indeed set aside C$3 billion each year but has always made it clear this is only in case the economy does worse than forecast, and he has always promised to use it to pay down the debt if not.

It was not clear if Robillard had in mind some other contingency fund.

Tuesday's decision was handed down by the Federal Court Trial Division. It can still go to the Federal Court of Appeals and then on to the Supreme Court.

Federal Court Judge John Evans rejected the government's argument that the original tribunal had made legal errors in calculating what was owed.

Reform's Solberg, while favoring equal pay for the same job, challenged the idea of comparing different jobs.

``To come up with some concept where a bunch of bureaucrats arbitrarily decide, based on some abstract theory, that one job of one kind that women dominate is somehow the same as another completely different job that men dominate -- it's unworkable,'' he told reporters.

The government and the union disagree on how much the decision might cost. The government has used the figure of C$5 billion. PSAC said Tuesday it could cost C$4 billion to C$4.5 billion -- but if its average figure of C$30,000 is multiplied by 200,000 workers, it yields a C$6 billion cost.

($1-$1.49 Canadian)