COURT FILE NO.: 717/03

DATE: 20050124

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, CRANE, PITT JJ.

B E T W E E N:

BUCYRUS BLADES OF CANADA LIMITED

John W. Woon, counsel on behalf of the Applicant

Applicant

• and -

EVELYN McKINLEY and PAY EQUITY HEARINGS TRIBUNAL

Derek Zulianello, counsel on behalf of the Respondent, Evelyn McKinley

Mary Cornish, counsel on behalf of the Respondent, the Pay Equity Hearings Tribunal

Respondents

HEARD: October 18, 2004

CRANE J.

[1] Bucyrus Blades, the former employer of the respondent, Evelyn McKinley, applies to the Divisional Court for judicial review of two decisions of the Pay Equity Hearings Tribunal (the Tribunal), confirming an Order of the Review Officer that directs the employer to:

(a) evaluate the male and female job classes within the establishment as of 1993, and using a gender neutral job evaluation system, compare the female job class of Data Entry Clerk and the female job class of General Office Clerk to the male job classes of the establishment;

(b) if there is no comparisons found using the job to job method, to use the proportional value method to determine if there are pay equity adjustments required;

(c) provide a copy of the results of the evaluations and comparisons to the Review Officer and Ms. McKinley;

(d) pay all pay equity adjustments required, if any, for all hours worked by the incumbents in the female job classes for the period April 5, 1994 to May 16, 2000 within 30 days of determine that adjustments are required.

(e) pay interest on all monies owing in accordance with the principles set out at paragraph 67 of Peterborough (Clow) (No.3), (1996), 7 P.E.R. 33.

[2] The parties proceeded before the Tribunal upon an Agreed Statement of Facts.

[3] The applicant’s head office is in Ohio. It employs approximately 10 persons in Ontario. Commencing in about 1998 Bucyrus consolidated and downsized into its Ohio office. It was this process, and in particular the moving to Ohio of the job duties of General Office Clerk, that resulted in the termination of the respondent’s employment. There is no issue of wrongful dismissal of the respondent.

[4] The Pay Equity Act does not apply to all employers in Ontario. The Pay Equity Office (s. 33.(1)) and the Review Officers (s. 34.(2)) do have pay equity jurisdiction for “private sector employers” who have at least 10 but fewer than 50 employees as of January 1, 1994. (Pay Equity Act s. 10(d))

[5] It is to be noted that Bucyrus was a border-line employer within the Pay Equity Act (the Act) based on the number of its employees varying around the minimum number for inclusion of 10. Since May, 2000, it is an employer in Ontario without a “female job class”.

[6] Bucryus terminated the employment of Ms. McKinley, offering her a termination package. Ms. McKinley obtained legal advice and thereafter made a settlement with her employer through a document styled “Release and Acknowledgement”.

[7] At this same time Ms. McKinley communicated to the Pay Equity Commission as to a complaint she had filed the previous October.

[8] To very briefly introduce the events following, a Review Officer made an Order. Bucryus appealed. The Tribunal affirmed the Order of the Review Officer. Bucryus applied to this Court for judicial review.

THE GENERAL SCHEME OF THE ACT

[9] In “Part I General”, the Legislature states its purpose.

4.(1) Purpose. -- The purpose of this Act is to redress systemic gender discrimination in compensation for work performed by employees in female job classes.

7.(1) Pay equity required. – Every employer shall establish and maintain compensation practices that provide for pay equity in every establishment of the employer.

(2) Idem. – No employer or bargaining agent shall bargain for or agree to compensation practices that, if adopted, would cause a contravention of subsection (1).

Section 4(2) provides the means to identify this form of discrimination by valuation of work performed.

[10] Part II of the Act groups public and large private section employers under a regime.

[11] Part III establishes the process for pay equity implementation for “small, private sector employers” being those who, “...on the effective date, employ more than nine and fewer than 100 employees”.

[12] Upon the application of Part III, s. 19 states:

Pay equity plans. -- An employer to whom this Part applies may establish pay equity plans for any of the employer’s establishments.

It is to be noted that the elective nature of the word “may” in s. 19 is confirmed in s. 20 by the words,

An employer who decides to establish a pay equity plan...

It is also noted that Part III exempts small, private sector employers from the mandatory requirement of posting required of employers in Part II of the Act.

[13] The applicant, did not post a notice of pay equity plan. Pursuant to s. 21, small employers were allowed to maintain compensation practices in place before the enactment of the Pay Equity Act, until January 1, 1994. Thereafter if they meet the number of employees requirement, employers come under the Act pursuant to s. 10 of the Act.

[14] Part IV is entitled “Enforcement”. It is under this regime that the present process was initiated by a “complaint” of the respondent. This document is dated October 15, 1999 and alleges that the employer has contravened s. 21(1) of the Pay Equity Act.

21.(1) Despite subsection 7(1) or (2), an employer to whom this Part applies may maintain compensation practices that were in existence in the employer’s establishment immediately before the effective date,

(a) until the fifth anniversary of the

effective date, if the employer

employs at least fifty but fewer

than 100 employees on the effective

date; and

(b) until the sixth anniversary of the

effective date, if the employer

employs at least ten but fewer than

fifty employees on the effective

date,

and, until the relevant anniversary date, a compensation change that is the same in percentage terms for female job classes and male job classes in the establishment shall be deemed not to be a contravention of those subsections even though the change is different in dollar terms for a female job class than for a male job class.

[15] S. 23(1) states that when a complaint is received “a review officer shall investigate the complaint and may endeavour to effect a settlement.”

[16] There were no further developments in the process until the respondent contacted the Pay Equity Commission on May 16, 2000 following her termination of employment that day.

[17] A Review Officer wrote to Bucyrus on July 24, 2000 requesting a pay equity plan as the response to the complaint. (Tribunal Record, p. 75)

[18] Bucyrus, through its solicitor, replied to the Review Officer informing of the settlement and requesting a resolution under s. 23(3).

23.(3) Decision to not deal with complaint. –- A review officer may decide that a complaint should not be considered if the review officer is of the opinion that,

(a) The subject-matter of the complaint is

trivial, frivolous, vexatious or made

in bad faith; or

(b) the complaint is not within the

jurisdiction of the Commission.

DECISION OF THE REVIEW OFFICER

[19] The Pay Equity Commissioner convened its process with Ms. McKinley as applicant and Bucyrus as respondent, before a Review officer who heard submissions and on December 3, 2002 issued an Order pursuant to s. 24(3) of the Act.

24.(3) If a review officer is of the opinion that there has been a contravention of this Act by an employer, employee or bargaining agent, the officer may order the employer, employee or bargaining agent to take such steps to comply with the Act as are set out in the order.

[20] The Review Officer made her Order upon issues stated by her as follows:

1. Was there a contravention of Section 7(1) that requires the employer to establish and maintain pay equity by the mandatory compliance date?

2. (Withdrawn by applicant/complainant McKinley).

3. Is the signed Release a bar to the application and entitlement to any retroactive pay equity adjustment?

[21] The Review Officer stated her view, at paragraph 3 of the Reasons, (Application Record, p. 37), that:

The Pay Equity Act is human rights legislation designed to redress systemic gender discrimination in compensation for work performed by employees in female job classes.

She expressed her opinion that a Release by one employee does not, in law, release an employer from its obligations to its female employees pursuant to the requirements of the Act.

[22] The Review Officer made two findings, namely, she concluded that there were no discussions between the complainant and Bucyrus at the time of the settlement and said “I therefore find the parties did not put their minds to the issue of a pay equity settlement.” (Reasons, page 37, Application Record). The Review Officer also found that Ms. McKinley had stated she had spoken to her employer, “on several occasions in the two and a half years prior to her termination regarding pay equity” and that the employer promised on different occasions that the issue would be dealt with. The Review Officer concluded, “The employer was therefore aware that pay equity was an issue. If the Employer wanted to prevent the Applicant from exercising her rights under the Pay Equity Act, or intended that pay equity adjustments were included in the terms of settlement, that would have been stipulated in the Release.”

[23] Bucyrus, in its submissions before us, stated that there is nothing in the evidence to support the conclusion that it, Bucyrus, through its representatives, knew that Ms. McKinley had any interest in pursuing a pay equity process at the time of the settlement and specifically, there were no discussions or communication between them in that regard. Counsel for Ms. McKinley did not dispute that submission. The Review Officer had accepted the statement of Bucyrus as the fact.

[24] The Review officer engaged herself in legal analysis in an interpretation of the contract. She concluded that the absence of words specifically naming the Pay Equity Act excluded that Act from the Release. This decision implicitly rejected an interpretation of the contract that seeks to give meaning to all of the words, particularly the words, “and specifically including any claim under the ‘Employment Standards Act of Ontario’, the ‘Human Rights Code of Ontario’, or any other similar legislation governing or related to the employment of the Releasor”. The decision of the Review Officer rejects an interpretation of the above words read in the context of the whole of the document, to include the Pay Equity Act. It is of significance that the Review officer, in her Reasons, and also counsel for the Tribunal before us, at paragraph 46 of counsel’s Factum, concluded that the Pay Equity Act is human rights legislation.

[25] The Review Officer’s reasoning was that if the parties intended to include the Pay Equity Act they should (or would) have named the Pay Equity Act. The Review Officer’s Reasons do not give a meaning to the words, “hereby release and forever discharge [Bucyrus] of and from all manner of action, claims or demands...”; and the words “including any claim under the Employment Standards Act of Ontario, the Human Rights Code of Ontario; or any other similar legislation governing or related to the employment of the Releasor”. (Emphasis is mine).

Order of Geri Sheedy, Review Officer, dated

3 December 2002

Applicant’s Application Record, Tab 4A,

p.35

[26] In response to the submission of Bucyrus that Ms. McKinley has acted in bad faith, the Review Officer observed and concluded:

The terms of the agreement and the release signed by the parties does not contain any reference to pay equity, and therefore Ms. McKinley could not have knowingly signed off on her rights under the Pay Equity Act.

Application Record, Tab 4A, p. 37

GENERAL PRINCIPLES

[27] A public duty under a remedial statute is not to be defeated by private contract. Re: Leisure World Nursing Homes Ltd. and Director of Employment Standards (1980), 29 O.R. (2d) 144 (Div. Ct.).

[28] These Reasons do not question the right of the Pay Equity Tribunal mandating that the employer, Bucyrus, prepare a Pay Equity Plan provided that on the agreed facts as accepted by the Tribunal there is at least one (former) employee to potentially benefit from a Plan.

[29] The second general principle is that under Canadian law private persons may order their affairs by contract, subject to established exceptions. In Ontario an employee on termination of employment has a variety of statutory entitlements. In this case the Pay Equity Act is one such entitlement reposit to Ms. McKinley. I am of the view that the law does not interfere with the right to contract out of the Pay Equity Act when settling a claim under that Act. It is important to note that this is not a case of an employee bargaining away her rights under that statute as a term of an employment agreement or as a precondition to employment.

[30] The third general principle is that the law does not prohibit the parties — employer and employee – to make a settlement of all of their rights and obligations on termination of the employment relationship. The issue then is, did they do so? If not, then the first principle noted above would apply. If yes, then the second principle applies.

[31] The Review Officer rendered her decision upon The Agreed Statement of Facts. There is no dispute on the facts of the case, nor are there any issues requiring an interpretation of the Act as applied to the circumstances that were invoked in the decision of the Review Officer. The issue as to whether the contract between the parties (the Acknowledgement and Release) is complete, final and binding is determinative by the operation of the law.

INTERPRETATION OF THE CONTRACT

[32] It is established precedent that Releases are contracts and are to be interpreted upon the same principles of interpretation as for any other contract. Bank of Credit and Commerce v. Ali [2002] A.C. 251 @ paras. 8 & 26; Bank of British Columbia Pension Plan v. Kaiser, (2000) 2000 BCCA 291, 137 B.C.A.C. 37.

[33] Essentially the parties, Ms. McKinley and Bucyrus Blades exchanged promises, namely, Ms. McKinley would release and be estopped from asserting any claims in consequence of her employment in exchange for a sum of money and a continuation of benefits. At issue for the Review Officer was whether a claim under the Pay Equity Act was included in the settlement and if so, whether her complaint (as withdrawn on settlement) should be refused recognition pursuant to s. 23(3).

[34] The Review Officer, in her Reasons for ordering the respondent, Bucyrus, to produce a pay equity plan, decided that the agreement (release) has not precluded (estopped) Ms. McKinley from maintaining a complaint under the Pay Equity Act and (should the plan mandate further pay) it has not estopped her from receiving that pay from Bucyrus.

[35] On this decision of the Review Officer, the employer requested a hearing before the Pay Equity Hearings Tribunal (the Tribunal) pursuant to s. 24(6).

[36] A hearing was held and upon Reasons, the Tribunal made an Order pursuant to s. 25(2)(d), confirming the Order of the Review Officer. The respondent, Bucyrus, then obtained a reconsideration hearing which was dismissed by the Tribunal upon similar reasons.

[37] The Employer applied to the Divisional Court for judicial review of the Orders of the Tribunal.

DISCUSSION OF THE REASONS OF THE TRIBUNAL

[38] The s. 7 issue raises the question of whether Bucyrus, absent Ms. McKinley, the general office clerk, is an employer with a female job class within the Pay Equity Act.

[39] It is within the Agreed Facts that after 1998 Ms. McKinley was the only female employee and after May, 2000 there have been no female employees of Bucyrus.

[40] In paragraph 22 of the Reasons, the Tribunal observed that it was arguable that the former female job class of “casual data entry clerk”, in the period 1994 to 1998 might benefit should a pay equity adjustment be determined. The Tribunal then stated that as the former position had been part-time it may not qualify under the Act. It is problematic for the Tribunal to reject the applicant’s (Bucyrus) argument that Ms. McKinley is the sole potential beneficiary, given the Tribunal’s statement on whether the former data entry position was within the Act: “The panel does not have enough evidence to make such a determination.” (Application Record, Tab 2, para. 22 @ pgs. 14 – 15)

[41] In paragraph 23 of its Reasons the Tribunal states its view that a Release might not preclude an Order in circumstances where a pay equity plan would benefit persons other than the releasor. In my view, the Tribunal is at this point, rightly addressing the Review Officer’s Issue 1.

[42] This reasoning informs a disposition in which an employer would be required to produce a pay equity plan applicable to female job classes while excluding a releasor/ former employee.

[43] Unfortunately in our view, the Tribunal has not made its analysis on its paragraph 23 issue.

[44] In paragraph 24 of its Reasons, the Tribunal observes that it does encourage and enforce settlements made by the parties to a hearing.

[45] In paragraph 25 the Tribunal moves to the issue of contract interpretation, making a decision on the interpretation of the parties’ contract without asking itself the appropriate question of law. The Tribunal, in my view, misdirects itself on the law:

In the case before us, the termination agreement and release is silent about any claims or entitlements arising under the Pay Equity Act. It cannot be said that Ms. McKinley is seeking to alter or avoid the operation of a specific term in her agreement.

[46] In paragraph 26, the Tribunal observed that Ms. McKinley has an interest in knowing whether or not her pay was in accordance with the Pay Equity Act, even should there be no requirement for a pay equity adjustment and an increase in her wages. This suggests a spirit of public mindedness on the part of Ms. McKinley not supported by the evidence. She has throughout the process into this Court, pursued a claim for additional pay.

[47] Paragraph 27 states the Tribunal’s conclusion of law:

In our view, the failure of the release to detail that it includes a release of any claim under the Pay Equity Act is fatal to the employer’s case.

[48] In my view the Tribunal may have interpreted the parties’ contract back from a desired result of enforcing the Pay Equity Act.

We do not think it appropriate to follow such an interpretation where the goal is to defeat a claim under the Pay Equity Act.

Reasons of the Tribunal, Application Record, pg. 16, paragraph 27

[49] It is suggested the appropriate process was to apply the law of contract interpretation without predisposition to the result.

[50] The Tribunal states its view on mutual intention of the parties in paragraph 28. The conclusion of the Tribunal to exclude the Pay Equity Act from the Release is made notwithstanding these two Agreed Facts:

The employer was not aware of the complaint, and the parties did not discuss it.

The Tribunal’s interpretation of the contract is that:

There was no agreement respecting Ms. McKinley’s entitlements under the Act.

[51] With respect, the Tribunal ought to have asked itself whether on the literal and ordinary meaning of the Release and Acknowledgement, the parties’ intention was to make a full and final release of all claims.

COMMON LAW PRINCIPLES OF CONTRACT INTERPRETATION

[52] In [BG Checo International Ltd. v. British Columbia Hydro and Power Authority, 1993}, 1 S.C.R. 12, the Supreme Court of Canada was required to reconcile a specific provision in the contract between the parties with several general provisions with which it was said to be inconsistent. LaForest and McLachlin JJ, stated for the majority:

It is a cardinal rule of the construction of contracts that the various parts of the contract are to be interpreted in the context of the intentions of the parties as evidence from the contract as a whole: K. Lewison, The Interpretation of Contracts (1989), at p. 124; Chitty on Contracts (26th ed. 1989), vol. 1, at p. 520. Where there are apparent inconsistencies between different terms of a contract, the court should attempt to find an interpretation which can reasonably give meaning to each of the terms in question. Only if an interpretation giving reasonable consistency to the terms in question cannot be found will the court rule one clause or the other ineffective:...

[53] Iacobucci J., in Manulife Bank of Canada v. Conlin, [1996] 3 S.C.R. 415 at paragraph 79, stated:

The cardinal interpretive rule of contracts is that the court should give effect to the intentions of parties as expressed in their written document. As Estey J. said in Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888, at p. 899, quoting Meredith J.A. in Pense v. Northern Life Assurance Co. (1907), 15 O.L.R. 131, at p. 137: ‘[In all contracts}, effect must be given to the intention of the parties, to be gathered from the words they have used.’ The court will deviate from the plain meaning of the words only if a literal interpretation of the contractual language would lead either to an absurd result or to a result which is ‘plainly repugnant to the intention of the parties’: McGuinness, supra, at p. 239; and see the reasons of Estey J. in Consolidated-Bathurst, supra, at p. 901.

[54] In Kothke v. Ekblad, 1999 ABQB 435, [1999] A.J. No. 644, the Alberta Court of Appeal was called on to interpret a document entitled “Release of All Claims”. The Release in that case, as here, is a standard form document. The Alberta Court of Appeal at paragraph 3 first quoting the Release, writes:

...Kothke releases and discharges Doucette and the AMA

and any other person, firm, or corporation charged or chargeable with responsibility or liability, their heirs, representatives and assigns, from any and all claims, demands, damages...arising from any act or occurrence up to the present time and particularly on account of all personal injury, ...sustained or...in consequence of the July 28, 2994 accident...

1. The basic, first principle of contractual interpretation is that words in contracts are to be given their plain meaning. Absent any ambiguity, the plain, ordinary meaning of the contract governs. The plain and ordinary meaning of this release is that anyone whose liability to Kothke arises from the July 28th accident is released. Hence, Ekblad is released.

2. In the result, the release covers Ekblad and he cannot now be sued by Kothke. To hold otherwise would be a case of possible hard facts making bad law. The appeal is allowed. Kothke’s claim is dismissed.

DETERMINING THE STANDARD OF REVIEW

[55] The Supreme Court of Canada in Voice Construction set out clear guidelines in determining the standard of review to be employed by a reviewing court of a judicial tribunal.

15. Canadian jurisprudence is plain that in assessing an arbitrator’s ruling, the reviewing judge should adopt a pragmatic and functional analysis to determine the appropriate standard of review: ...Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982...The purpose is to ascertain the extent of judicial review that the legislature intended for a particular decision of the administrative tribunal: Pushpanathan, supra, at para. 26;

16. The pragmatic and functional approach involves the consideration of four contextual factors: (1)the presence or absence of a privative clause or statutory right of appeal; (2) the expertise of the tribunal relative to that of the reviewing court on the issue in question; (3) the purposes of the legislation and the provision in particular; and (4) the nature of the question – law, fact or mixed law and fact:...No one factor is dispositive:...

18....A decision of a specialized tribunal empowered by a policy-laden statute, where the nature of the question falls squarely within its relative expertise and where that decision is protected by a full privative clause, demonstrates circumstances calling for the patent unreasonableness standard. By its nature, the application of patent unreasonableness will be rare. A definition of patently unreasonable is difficult, but it may be said that the result must almost border on the absurd. Between correctness and patent unreasonableness, where the legislature intends some deference to be given to the tribunal’s decision, the appropriate standard will be reasonableness. In every case, the ultimate determination of the applicable standard of review requires a weighing of all pertinent factors: see Pushpanathan, supra, at para. 27.

19. Only after the standard of review is determined can the administrative tribunal’s decision be scrutinized. It is important to recognize that the same standard of review will not necessarily apply to every ruling made by an arbitrator during the course of an arbitration:...

20. ...Although the language and approach of the “preliminary”, “collateral” or “jurisdictional” question has been replaced by this pragmatic and functional approach, the focus of the inquiry is still on the particular, individual provision being invoked and interpreted by the tribunal. Some provisions within the same Act may require greater curial deference than others, depending on the [four] factors which will be described in more detail below. To this extent, it is still appropriate and helpful to speak of “jurisdictional questions” which must be answered correctly by the tribunal in order to be acting intra vires. But it should be understood that a question which “goes to jurisdiction” is simply descriptive of a provision for which the proper standard of review is correctness, based upon the outcome of the pragmatic and functional analysis. In other words, “jurisdictional error” is simply an error on an issue with respect to which, according to the outcome of the pragmatic and functional analysis, the tribunal must make a correct interpretation and to which no deference will be shown. [Emphasis added.]

Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92 [2004] S.C.C. 23 @ pages 6, 7 & 8;

STANDARD OF REVIEW

[56] The analysis starts with what is referred to as the central question for the Court, namely, who did the Legislature intend should answer the question at issue, the Tribunal or the Courts? Pushpanathan, supra. Secondly, the Court is to consider a spectrum of deference from correctness to patent unreasonableness and to include a “reasonable simpliciter” standard within the spectrum. Canada (Director of Investigation and Research) v. Southam Inc. (1997), 1 S.C.R. 748. The required approach is to use the pragmatic and functional analysis to determine the legislative intent. This approach involves the consideration of all of four contextual factors.

[57] The Act does provide a privative clause and the Tribunal does have specialized expertise in the administration of pay equity and the application of that legislation. The purpose of the Act is clearly one of broad social policy as stated in section 4. None of this is controversial as between counsel. The argument and determination really lies in factor 4, the nature of the question.

[58] The Review Officer stated the issues as she saw them before her and the Tribunal was asked, pursuant to s. 25(2)(d) to either confirm, vary or revoke her Order. These Reasons have sought in an analysis through paragraph 52, to define the issue that the Tribunal was required to decide.

[59] It is clear from its Reasons that the Tribunal decided to engage in a legal interpretation of the parties’ agreement. It did an analysis of the wording of their contract and came to a conclusion on the intention of the parties. In my view, this is the application of the common law of contract. The review standard of correctness applies.

[60] The Tribunal also engaged in a policy determination as to whether the employer (absent Ms. McKinley) was subject to the provisions of the Pay Equity Act, and in particular s. 7. This issue is, on this Record, one of mixed fact and law to which a standard of reasonableness could apply.

[61] The Pay Equity Act does set its primary purpose as fair compensation for females based on the value of their work. However, if in a particular workplace there are no female job classes, the issue changes. In this case, the Tribunal was unable to find that there were any females at Bucyrus within the parameters of the Act, other than the respondent, Ms. McKinley. Where, as in this case, the Tribunal makes a decision upon “facts” that it does not find as facts, that decision must, on any standard of reasonableness, be unreasonable.

CRITIQUE OF THE TRIBUNAL’S REASONS FOR A GENERAL APPLICATION OF THE ACT

[62] The Tribunal failed to consider (or if considered), failed to give reasons for rejecting the evidence (Agreed Facts) that there were no female employees other than Ms. McKinley since 1998, that there have been no female employees since May 2000, that the employer has restructured to eliminate the future possibility of female job classes, and that the Order of the Review Officer was made two and one-half years after Ms. McKinley ceased to be an employee of Bucyrus.

[63] The Tribunal has reasoned for a systemic requirement of the pay equity process at this employer on the basis of a female job class of data entry clerk; while in its own reasons it finds that there is not sufficient evidence on the record to determine whether this position is within the jurisdiction of the Act.

The panel does not have enough evidence to make such a determination.

Reasons of the Tribunal, paragraph 22

Applicant’s Record, page

It is suggested that another way of saying the above is that there is no finding by the Tribunal of any female job classes at Bucyrus other than the former position of Ms. McKinley.

[64] Although it is questionable on the Reasons whether a finding was made, let us assume that the Tribunal has found that the applicant, Bucyrus, is subject to the Review Officer’s Order to prepare a pay equity plan on the basis that Part IV did not apply only and specifically to Ms. McKinley, but to the workplace of Bucyrus generally. (This is the dispute of counsel of whether the process is “complaint” based.) This finding would be without first finding jurisdiction that there was anyone in a female job class other than the applicant, Ms. McKinley. Even should the Act apply to Bucyrus on the basis of solely Ms. McKinley’s female job class, the issue of her estoppel from claiming has to be decided and, if decided against her receiving a pay adjustment, the whole exercise of a pay equity plan is moot, there being no one for whom a social purpose may be advanced. On the other hand, if the decision is that she is not estopped by her settlement contract, then the Tribunal’s decision is by force of logic based on contract interpretation, namely that the contract is not completely, final, and binding.

TRIBUNAL REVIEW OF SETTLEMENT

[65] The Commission has jurisdiction to protect its process. That being so, a settlement in the course of an outstanding complainant process is subject to disclosure to, and scrutiny of, the Commission that the settlement meets (is not offensive to) the objectives and administration of the Act.

[66] The Tribunal did, in part, address an issue as to whether the settlement made between the parties was one in which the Tribunal should review and if on such a review, whether the settlement was contrary to the purposes of the Pay Equity Act.

[67] This court, in Re Pritchard and Ontario Human Rights Commission, 45 O.R. (3d) 97, at p. 103 and following, made an analysis of the circumstances and terms of a settlement and release of claims. There are two issues under such a review as applied to this case. Firstly, whether the employer has improperly sought to contract itself out of the provisions of the Pay Equity Act. Secondly, whether the employee, in pursuing a complaint under the Pay Equity Act, after making a settlement and receiving the benefits from that settlement, is then, in pursuing a claim before the Review Officer and Tribunal acting in bad faith pursuant to s. 23(3)(a):

23(3) Decision to not deal with complaint. – A review officer may decide that a complaint should not be considered if the review officer is of the opinion that,

(a) the subject-matter of the complaint is

trivial, frivolous, vexatious or made

in bad faith;

As developed in Re Pritchard, an analysis of the legal exceptions to the enforcement of a settlement contract involves issues of duress (pressure of time and economic need), unconscionable bargain (pressure of bad consequences), failure of good faith bargaining and misinformation. The Tribunal in this matter did appear from its Reasons, to concern itself with the context and circumstances of the settlement and release explicitly and implicitly. The Tribunal noted that the applicant had the Release for three days before returning it to the respondent and only after she had taken legal advice from her solicitor. The Tribunal considered the questions of unconscionable bargain and failure of good faith bargaining, misinformation and pressure of bad consequences. The Tribunal stated that it could not and did not determine that the terms of the Release are contrary to what would be the result of a pay equity plan under the Pay Equity Act. Given that there is no Plan, the Tribunal cannot conclude otherwise.

[68] In summary, on the first issue of the employer avoiding the consequences of the Act, the Review Officer and subsequently the Tribunal, found no basis to set aside the settlement. On the second issue of estoppel, given that the Review Officer and the Tribunal interpreted the contract to exclude the Pay Equity Act from the Release, the Releasor (Ms. McKinley) was not in breach of s. 23(3)(a) of the Act. (My emphasis.)

THE CONTRACT

[69] The agreement between Bucyrus and Ms. McKinley in the determination of their employment relationship is set out in its entirety.

IN CONSIDERATION of the terms and conditions set out in the termination agreement attached hereto, I, Evelyn McKinley (hereinafter referred to as the “Releasor”, which term includes heirs, executors, administrators, successors and assigns) hereby release and forever discharge Bucyrus Blades of Canada Limited, (hereinafter referred to as the “Releasee”, which term includes officers, directors, agents, employees, successors and assigns and all related and affiliated corporations and their officers, directors, agents, employees, successors and assigns) of and from all manner of action, claims or demands which the Releasor had against the Releasee, now has or hereafter may have including without limiting the generality of the foregoing any claims arising out of the Releasor’s employment or the termination of that employment with the Releasee.

EXCEPT FOR MATTERS arising out of the termination agreement, the Releasor hereby specifically covenants, represents and warrants to the Releasee that she has no further claim against the Releasee for or arising out of her employment with the Releasee or the termination of such employment including without limiting the generality of the foregoing, any claims for pay, overtime pay, interest, benefits, and/or vacation pay and specifically including any claim under the Employment Standards Act of Ontario, the Human Rights Code of Ontario, or any other similar legislation governing or related to the employment of the Releasor. The Releasor also hereby acknowledges that upon payment in accordance with the termination agreement she will be paid all amounts owing to her under the foregoing statutes. In the event that the Releasor should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding or make any complaint against the Releasee or anyone connected with the Releasee for or by reason of any cause, matter or thing, this document may be raised as an estoppel and complete bar to any such claim, demand, action, proceeding or complaint. [My emphasis].

AND FOR THE CONSIDERATION the Releasor agrees not to make any claim or take any proceeding in connection with any of the claims released b y virtue of the preceding paragraphs against any other person or corporation who might claim contribution or indemnity from the Releasee by virtue of the said claim or proceeding.

THE RELEASOR acknowledges and agrees that she has read this Release and has had the opportunity to obtain independent legal advice with respect thereto and understands that it contains a full and final release of all claims that she has, or may have, against the Releasees relating to her employment or the termination of such employment and that there is no admission of liability on the part of the Releasee and that any such liability is denied.

IT IS FURTHER UNDERSTOOD AND AGREED that the Releasor shall not disclose to anyone any confidential information acquired by her in the course of her employment with the Releasee and that the terms of the said termination agreement and this Release shall remain confidential between the parties and shall not be disclosed by the Releasor except as required by law.

IN WITNESS WHEREOF I have hereunto set may hand land seal this 19 day of May, 2000.

SIGNED, SEALED AND

DELIVERED )

in the presence of )

“Les Osborne )

“signature” ) Evelyn McKinley

Witness Evelyn McKinley

APPLICATION OF THE LAW OF CONTRACTUAL INTERPRETATION

[70] The Tribunal found that the Release did not include the Pay Equity Act. The Tribunal made that finding without deciding that excluding the Pay Equity Act from the words “or other similar legislation” of the Release puts those words in conflict with the “full and final release” words of the Release. Further the Tribunal’s analysis that had the applicant, Bucyrus, intended the Pay Equity Act to be included in the Release, it would have stated so specifically, while, in the same analysis, failed to look at the corollary, namely, that had the respondent, Ms. McKinley, the intention prior to the signing of the Release that she would make a complaint under the Pay Equity Act, (and the applicant not having such knowledge), it might well have been incumbent upon the respondent to instruct her solicitor to specifically exclude the Pay Equity Act, from the Release, particularly having in mind the words “Human Rights Code or other similar legislation governing or related to the employment of the Releasor”, “Hereby release and forever discharge Bucyrus Blades...of and from all manner of action, claims, or demands which the Releasor had against the Releasee, now has or hereafter may have including without limiting the generality of the foregoing, any claims arising out of the Releasor’s employment...with the Releasee”.

[71] In my view once the Tribunal has set its task to interpret and give meaning to the parties’ contract, it must do so in accordance with general principles of law, which has not been done in this case.

[72] I conclude that the Pay Equity Act is “similar legislation” to the Human Rights Code in the context of this contract. I conclude that the general words of the Release are sufficient in themselves and thirdly that the general words are not in conflict with the specific words.

IS THE EMPLOYER SUBJECT TO THE ACT?

[73] It is my view that should the Tribunal have based its decision (in whole or in part) upon a fact that it has expressly not found, the decision is unreasonable on the face of its reasons, meeting, (if required), the standard of unreasonableness. In Voice Construction Ltd. v. Construction & General Workers Union, Local 92 (supra) at para. 41, LeBel J. in delivering judgment for the court stated, with approval the observation of Iacobucci J. in Law Society of New Brunswick v. Ryan, 2003 SCC 20, 2003 1 S.C.R. 247, paragraph 49:

The reasonableness standard requires a reviewing court to stay close to the reasons given by the tribunal and ‘look to see’ whether any of those reasons adequately support the decision. The ‘rationally supported by the relevant legislation’ standard is one that not only signals that great deference is merited where discretion has been exercised, but also makes clear that a reviewing court cannot let an irrational decision stand. As I observed in

C.U.P.E., Local 79, supra, at para. 79, this approach should apply to judicial review on any reasonableness standard.

DISPOSITION

[74] Had there been no settlement agreement, the Pay Equity Commission had the unquestioned statutory authority to make the order it did. Therefore, the issue is whether the contract of the parties is complete, final and binding. The contract is governed by general contract law. The standard of review is correctness.

[75] On a contract law analysis the parties are found to be bound by their agreement. On public policy analysis, there is no basis not to enforce the parties’ contract.

[76] In the result, Ms. McKinley is found to have resolved her interest in a pay equity plan by way of her contractual settlement. Upon an absence of finding of other female job classes, the order of the Review Officer, affirmed by the Tribunal that is subject to this judicial review, is moot.

[77] I would, upon judicial review, grant the application and quash each of the decision and the affirming decision of the Tribunal and direct the Tribunal to revoke the Order of the Review Officer, pursuant to the provisions of s. 22(3) and s. 25(2)(d) of the Act.

COSTS

[78] At the conclusion of argument the issue of costs was reserved for written submissions. Should counsel not settle this issue, brief written submissions are to be exchanged between counsel within 21 days from this date and those submissions, together with Replies, if any, are to be delivered to the Court within 30 days hereof.

CRANE J.

Released: January 24, 2005

COURT FILE NO.: 717/03

DATE: 20050124

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, CRANE, PITT J.J.

B E T W E E N:

BUCYRUS BLADES OF CANADA LIMITED

Applicant

• and -

EVELYN MCKINLEY and PAY EQUITY HEARINGS TRIBUNAL

Respondents

John W. Woon for the Applicant

Derek Zulianello for the Respondent, Evelyn McKinley

Mary Cornish for the Respondent, Pay Equity Hearings Tribunal

HEARD: October 18, 2004

Pitt J. (Dissenting)

[26] This is an employer application by way of judicial review to set aside the decisions of the Pay Equity Hearings Tribunal (the “Tribunal”) of August 15, 2003 and October 14, 2003, that affirmed the order of a Review Officer of December 3, 2002.

[27] The grounds set out in the application are the following:

(a) The Tribunal exceeded its jurisdiction by making incorrect and patently unreasonable decisions that the Respondent, Evelyn McKinley (“Ms. McKinley”), could pursue a complaint under the Pay Equity Act after executing a full and final release of all claims arising out of her employment, which settled all claims she had against the employer under any applicable statute, including the Pay Equity Act.

(b) The Tribunal exceeded its jurisdiction by making incorrect and patently unreasonable decisions in failing to find that the complaint of Ms. McKinley, is trivial, frivolous, vexatious, made in bad faith, and an abuse of process.

(c) Sections 2 and 6(1) of the Judicial Review Procedure Act; and

(d) Such further and other grounds that counsel may advise and this Honourable Court may permit.

[28] The operative part of the Tribunal’s order is:

29. … the Tribunal declines to revoke the Order of the Review Officer dated December 28, 2002. The Tribunal confirms the Order and directs the employer to:

(a) evaluate the male and female job classes within the establishment as of 1993, and using a gender neutral job evaluation system, compare the female job class of Data Entry Clerk and the female job class of General Office Clerk to the male job classes of the establishment;

(b) if there is no comparisons found using the job to job method, to use the proportional value method to determine if there are pay equity adjustments required;

(c) provide a copy of the results of the evaluations and comparisons to the Review Officer and Ms. McKinley;

(d) pay all pay equity adjustments required, if any, for all hours worked by the incumbents in the female job classes for the period April 5, 1994 to May 16, 2000 within 30 days of determining that adjustments are required. [My emphasis.]

(e) pay interest on all monies owing in accordance with the principles set out at paragraph 67 of Peterborough (Clow) (No.3), (1996), 7 P.E.R. 33.

[29] I am of the view that the application ought to be dismissed for the reasons that follow:

[30] The Tribunal correctly framed the issue in the following manner:

The question at issue can be simply stated. Can Evelyn McKinley maintain a complaint to the Pay Equity Office, and benefit from the Review Officer’s Order, after having made a settlement with the employer arising out of her termination of employment, and having signed a release?

FACTS

[31] The relevant facts are not in dispute. They can be stated briefly and are excerpted, in some parts verbatim, from the Tribunal’s reasons:

Ms. McKinley was hired on April 5, 1993 as a part-time office clerk working four hours per day in the office of the Applicant’s facility in Lindsay. Effective August 21, 1995, she started working eight hours per day and some overtime. In October 1999, her overtime opportunities were eliminated after the initial restructuring of the Lindsay office operations took place. She was employed by the Applicant in this non-managerial clerical position for just over seven years. Her position no longer exists and no new employee has been hired to replace her since other employees absorbed her duties.

Ms. McKinley started complaining to the applicant about her pay rate and pay equity beginning in or about 1997. She made a formal complaint to the Pay Equity Office in October 1999 alleging that the applicant contravened subsections 7(1) and 9(2) of the Pay Equity Act. The respondent, Ms. McKinley withdrew the allegations of contravention under subsection 9(2) of the Act by the applicant in or about 2001.

The Tribunal accepted the applicant’s [employer’s] submission that it was not aware of the complaint and the parties did not discuss it.

Since at least 1999, the respondent was the only female employee of the applicant working in Ontario. Periodically, there was a casual data entry clerk, who assisted the respondent in the Lindsay office until 1998 and this job was performed by a female. Currently, the applicant has no female employees in Ontario. The female job classes referred to in the Order were completely redundant by 1998, in the case of the data entry clerk, and by 2000, in the case of the general office clerk.

Ms. McKinley’s employment was terminated effective May 16, 2000, due to restructuring of the applicant’s Lindsay office operations. At that time, Ms. McKinley was terminated by letter dated May 16, 2000 and she entered into a termination agreement dated May 19, 2000. She executed a release as part of the said agreement. [The applicant has fulfilled all its obligations to the respondent under the impugned agreement.]

Although Ms. McKinley executed a release and acknowledgement on May 19, 2000 in favour of the applicant and others, Ms. McKinley continued to complain to the Pay Equity Office seeking retroactive wage adjustments and wrote the Pay Equity Office on May 19, 2000.

THE RELEASE

[32] The key parts of the release are provided below only because it is essentially the sole basis for the applicant’s claim for relief:

IN CONSIDERATION of the terms and conditions set out in the termination agreement attached hereto, I, Evelyn McKinley (hereinafter referred to as the “Releasor”) … hereby release and forever discharge Bucyrus Blades of Canada Limited, (hereinafter referred to as the “Releasee”) … of and from all manner of action, claims or demands which the Releasor had against the Releasee, now has or hereafter may have including without limiting the generality of the foregoing any claims arising out of the Releasor’s employment or the termination of that employment with the Releasee.

EXCEPT FOR MATTERS arriving out of the termination agreement, the Releasor hereby specifically covenants, represents and warrants to the Releasee that she has no further claim against the Releasee for or arising out of her employment with the Releasee or the termination of such employment including without limiting the generality of the foregoing, any claims for pay, overtime pay, interest, benefits, and/or vacation pay and specifically including any claim under the Employment Standards Act of Ontario, the Human Rights Code of Ontario, or any other similar legislation governing or related to the employment of the Releasor. The Releasor also hereby acknowledges that upon payment in accordance with the termination agreement she will be paid all amounts owing to her under the foregoing statutes. In the event that the Releasor should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding or make any complaint against the Releasee or anyone connected with the Release for or by reason of any cause, matter or thing, this document may be raised as an estoppel and complete bar to any such claim, demand, action, proceeding or complaint. [My emphasis.]

THE RELEASOR acknowledges and agrees that she has read this Release and has had the opportunity to obtain independent legal advice with respect thereto and understands that it contains a full and final release of all claims that she has, or may have, against the Releasee relating to her employment or the termination of such employment and that there is no admission of liability on the part of the Releasee and that any such liability is denied.

ANALYSIS

[33] As I understood them, the real differences in the parties’ positions stem from the applicant’s view that the case is all about the enforceability of a settlement untainted by any obvious defects. The respondents, on the other hand, see the case as involving at its core, the statutory duty of a body mandated with the responsibility to take affirmative action to redress gender discrimination in the compensation of employees in female job classes in the province. Further, the respondents take the view that in exercising its responsibilities, the Pay Equity Tribunal is not required to shield the employer from the consequences naturally flowing from its decisions, except where it is clear that such consequences will work an injustice that is inconsistent with the object of the legislation.

It is useful to note that the issue is not whether the “settlement” reached between the employer and employee ought to be set aside for lack of a true consensus.

THE SCHEME OF THE ACT

[9] The preamble to the Act provides:

Whereas it is desirable that affirmative action be taken to redress gender discrimination in the compensation of employees in female job classes in Ontario;

Sections 4, 6(1), 7(1) and (2), 30, 33 and 34 provide as follows:

4. (1) Purpose.-The purpose of this Act is to redress systemic gender discrimination in compensation for work performed by employees in female job classes.

(2) Identification of systemic gender discrimination.- Systemic gender discrimination in compensation shall be identified by undertaking comparisons between each female job class in an establishment and the male job classes in the establishment in terms of compensation and in terms of the value of work performed. 1987, c. 34, s. 4.

6. (1) Achievement of pay equity.- For the purposes of this Act, pay equity is achieved under the job-to-job method of comparison when the job rate for the female job class that is the subject of the comparison is at least equal to the job rate for a male job class in the same establishment where the work performed in the two job classes is of equal or comparable value. 1987, c. 34, s. 6(1); 1993, c. 4, s. 4(1).

7. (1) Pay equity required. – Every employer shall establish and maintain compensation practices that provide for pay equity in every establishment of the employer.

(2) Idem. – No employer or bargaining agent shall bargain for or agree to compensation practices that, if adopted, would cause a contravention of subsection (1). 1987, c. 34.s. 7.

30. (1) Exclusive jurisdiction.- The Hearing Tribunal has exclusive jurisdiction to exercise the powers on conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it and the action or decision of the Hearing Tribunal thereon is final and conclusive for all purposes.

31. (1) Pay Equity Office. – The Pay Equity Office is responsible for the enforcement of this Act. 1987 c. 34, c. 33; 1993, c. 4, s. 20(1).

32. (2) Review officers, duties. – Review officers shall monitor the preparation and implementation of pay equity plans, shall investigate objections and complaints filed with the Commission, may attempt to effect settlements and shall take such other action as set out in this Act or in an order of the Hearings Tribunal.

A sampling of the enforcement provisions are:

22. (1) Complaints. – Any employer, employee or group of employees, or the bargaining agent, if any, representing the employee or group of employees, may file a complaint with the Commission complaining that there has been a contravention of this Act, the regulations or order of the Commission.

23. (1) Investigation of complaints. – Subject to subsection (2), when the Commission receives a complaint, a review officer shall investigate the complaint and may endeavour to effect a settlement.

24. (1) Orders by review officers. – Where a review officer is of the opinion that a pay equity plan is not being prepared as required by Part II and II.1, the review officer may order the employer and the bargaining agent, if any, to take such steps as are set out in the order to prepare the plan. 1987, c. 34, s. 24(1); 1993, c. 4, s. 14(1); 1996, c. 1, Sch. J, s. 5(1).

(2) Idem.- Where a review officer is of the opinion that a pay equity plan is not being implemented according to its terms, the review officer may order that the employer to take steps as are set out in the order to implement the plan. 1987, c. 34, s. 24(2).

2.(2.1) Same.- If a review officer is of the opinion that because of changed circumstances a pay equity plan is no longer appropriate, the officer may order the employer to amend the plan in such manner as it set out in the order or to take such steps with a view to amending the plan as are set out in the order. 1993, c. 4, s. 14(2).

24. (3) Same.- If a review officer is of the opinion that there has been a contravention of this Act by an employer, employee or bargaining agent, the officer may order the employer, employee or bargaining agent to take such steps to comply with the Act as are set out in the order. 1993, c. 4, s. 14(3).

I have included the sampling of the enforcement sections to negate what I believe to be the erroneous argument of the applicant that those sections illustrate the complaint-based nature of the Act; and to underscore the oversight functions of the Tribunal.

THE STANDARD OF REVIEW

[10] The courts have repeatedly held that decisions of the Tribunal should be reviewed on the standard of patent unreasonableness. See Ontario Nurses’ Association v. Ontario (Pay Equity Hearings Tribunal) (1995), 23 O.R. (3d) 43 (C.A.) at 53-57; Ontario Nurses’ Association v. Haldimand-Norfolk (Regional Municipality), [1989] O.P.E.D. No. 3 (P.E.H.T.) at 4-5; affirmed [1989] O.J. No. 1995 (Div. Ct.); affirmed [1990] O.J. No. 1745 (C.A.) at 2; Employees at the Queen Street Mental Health Centre v. Ontario (Management Board Secretariat), [2001] O.J. NO. 2255 (Div. Ct.) at para. 9; Glengarry Memorial Hospital v. Pay Equity Hearings Tribunal, [1993] O.J. No. 3136 (Div. Ct.) at paras. 25-29. [this case was overturned by the Court of Appeal].

[11] The basis for this standard of review was succinctly stated in the Ontario Court of Appeal decision in Ontario Nurses’ Association v. Ontario (Pay Equity Hearings Tribunal) [supra] at page 56:

The language of the statute makes it clear that the overall responsibility for when, whether and how pay equity is achieved lies with the Pay Equity Commission and its adjudicative branch, the Pay Equity Hearings Tribunal. The tripartite membership of the Tribunal consists of representatives from labour, management, and legal spheres whose backgrounds and continuing exposure to the legislation given them a unique expertise. And it is clear from the privative clause and the legislation as a whole that the purpose of the Tribunal is to serve as the exclusive adjudicative body dealing with the redress of systemic gender discrimination in compensation for work, or pay equity.

That is why, in my view, it was inappropriate for the Divisional Court to define s. 6(1) of the Act as limiting the Tribunal’s jurisdiction.

I believe that the analysis required by Pushpanathan v. Canada (Minister of Citizenship and Immigration) (1998), 160 D.L.R. (4th) 193 (S.C.C.) is contained in the above paragraph and no more need be said about it.

[12] I am conscious of the observation made by the Supreme Court of Canada in Voice Construction Ltd. v. Construction & General Workers’ Union, Local 92 2004 SCC 23, [2004] 1 S.C.R. 609 dated April 8, 2004 at page 618 that:

… By its nature, the application of patent unreasonableness will be rare. A definition of patently unreasonable is difficult, but it may be said that the result must almost border on the absurd. Between correctness and patent unreasonableness, where the legislature intends some deference to be given to the tribunal’s decision, the appropriate standard will be reasonableness. In every case, the ultimate determination of the applicable standard of review requires a weighing of all pertinent factors: See Pushpanathan v. Canada (Minister of Citizenship and Immigration) (1998), 160 D.L.R. (4th) 193 (S.C.C.).

My opinion that the Tribunal was right is not affected by the possibility that the standard may be found to be reasonableness.

[13] I completely disagree with the submissions of the applicant that:

… determining whether a complainant can pursue a matter after having settled all claims and having signed a full and final release is jurisdictional and the Tribunal’s findings with respect to this issue should be reviewed on a correctness standard because the fundamental issues concern law of general application. The Tribunal must correctly answer the questions of law raised. Toronto (City) v. C.U.P.E., Local 79 (2003), S.C.C. dated November 6, 2003;

Ontario v. O.P.S.E.U. (2003), S.C.C. 64 dated November 6, 2003; Re Trent University Faculty Association and Board of Governors of Trent University (1997), 35 O.R. (3d) 375 (C.A.).

[14] Even if the finding of the Tribunal is more appropriately viewed as a question of mixed fact and law, however, it is respectfully submitted that the Tribunal’s decision on that issue must be afforded a high degree of deference. The “law” component of that determination is the provisions of the Pay Equity Act and the public interests under the Act, rather than the contractual principles relied upon by the appellant. The determination is “fact-intensive”, and involves an assessment of specialized facts and relationships, which are at the core of the Board’s exclusive jurisdiction. See Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247; and Dr. Q. v. College of Physicians and Surgeons of B.C., 2003 SCC 19, [2003] 1 S.C.R. 226.

[15] There are some key portions of the Tribunal’s reasons that solidify my view that the Tribunal was particularly sensitive to the issues raised and gave very careful and reasonable consideration to them:

From paragraph 28. There are no circumstances present which suggest that the parties mutually intended to preclude Ms. McKinley from maintaining a complaint under the Act at the time the settlement agreement and release were signed. The employer was not aware of the complaint, and the parties did not discuss it. Consequently, this is not a situation in which one party is seeking to change the terms of an agreement after it has been executed. There was no agreement respecting Ms. McKinley’s entitlements under the Act.

That was a finding of fact that could, and should, in my view, be found from an assessment of all the evidence. There were factors that would have supported such a finding that were not articulated specifically in the reasons:

(a) When she signed the release, Ms. McKinley could not have known what her entitlement would have been if the employer had complied with the statute, so it could not have been in her contemplation.

(b) The imbalance of power between the employer and employee. See McKinley v. BC Tel (2001), 2001 SCC 38, 9 C.C.E.L. (3d) 167 (S.C.C.).

These additional reasons would also bolster the Tribunal’s decision in finding that the complaint was not frivolous, vexatious or made in bad faith.

From paragraph 21. … In our view, though, it is important to remember that the Order was not specifically about Ms. McKinley. True, she had brought the complaint, but the Order required the employer to comply with the Act and establish that as at January 1, 1994, it had established and maintained pay equity. The Officer told the employer that to prove it had met section 7(1), it was required to undertake job to job comparisons and if that did not produce comparators, to apply the proportional value methodology. Although Ms. McKinley, who occupied a female job class, may have benefited from the employer’s compliance with the Act, the Order was not personal to her.

Paragraph 22. However, it is at least arguable that there was another female job class, that of Data Entry Clerk from 1994 to 1999, based on information provided by counsel to the employer in an attachment to his July 30, 2001 letter to the Pay Equity Office. It may be that position was “casual” within the meaning of section 8(3) and ultimately, to be excluded from consideration. The panel does not have enough evidence to make such a determination. But in any event, with respect, it is not accurate to say that compliance with the Act is synonymous with providing a benefit to Ms. McKinley if there was potentially one more female job class. We make this point to highlight that the Order of the employer seeks to have revoked was not “about” Ms. McKinley but about the employer’s failure to comply with the statutory obligation to establish and maintain pay equity.

From paragraph 23. … Because the Order that the employer seeks to have revoked in this case requires it to establish that it has met its pay equity obligations generally, we would not find that a settlement with Ms. McKinley concerning her pay equity entitlements would relieve the employer of its obligation to establish it complied with section 7(1) of the Act. [My emphasis.]

Paragraph 24. But in any event, we do not find that Ms. McKinley entered into a termination agreement and signed a release that settled her possible pay equity entitlement. We agree with the proposition that parties should generally be held to their agreements. The Tribunal has an institutional interest, itself, in seeing agreements complied with. Section 25.1 permits parties to an application before the Tribunal to settle it in writing, after which it becomes binding on the parties, and enforceable at the Tribunal.

From paragraph 26. We disagree with the employer’s characterization of Ms. McKinley’s claim under the Act as a claim for pay. … But a complaint that an employer has not complied with section 7(1) of the Act is more than a demand for wages. It is a demand that an employer show how it has met the requirements of the Act. The employer could comply with the Act and no more pay would go to Ms. McKinley if the employer established that after job to job comparison, or applying the proportional value method, or some other method open to Part III employers, that pay equity had been achieved and no adjustments were required. [My emphasis.]

CONTRACTING OUT AND ESTOPPEL

[16] Quite apart from the well-established principle followed in cases like Re Leisure World Nursing Homes Ltd. and Director of Employment Standards (1980), 29 O.R. (2d) 144 (Div. Ct.) at 154-156; Pritchard v. Ontario (Human Rights Commission) (1999), 45 O.R. (3d) 97 (Div. Ct.) at 103-104, and J.D.S. Investments Limited, [1982] O.L.R.B. Rep. November 1657 at 1659 that Tribunals entrusted with enforcing public remedial statutes must be reluctant to acquiesce in contracting out, section 7(2) can properly be interpreted as expressly prohibiting an employer from entering into such an agreement with immunity.

[17] It is important to recall that the release was silent about claims or entitlement under the Pay Equity Act. While there may be some similarities between the Act and the Employment Standards Act and the Human Rights Code, there are some fundamental differences between those statutes which would justify the application of the Contra Proferentum rule. The Pay Equity Act is unique in that it expressly addresses only compensation.

[18] It should not be overlooked that the employer’s right to raise the release as an estoppel is with respect to future claims; there was no reference in the release to the employee’s complaint to the Pay Equity Office in 1997 or 1999.

[19] The Act is distinctive in its pro-active and affirmative design and imposes a pro-active obligation to achieve pay equity on an establishment-wide rather than individual basis. The impact and significance of the release must be evaluated in context, giving full recognition to the systemic and pro-active structure of the Act.

As counsel for the Tribunal has submitted in assessing the impact of any settlement or release, the Tribunal would have been required to consider:

(a) the systemic rather than individual nature of the obligations imposed by the Act;

(b) the nature of the Act’s protections as fundamental anti-discrimination remedies;

(c) the substantive minimum standards imposed by the Act and whether they are protected; and

(d) the nature of the breach of the Act that has been alleged by the complaint.

[20] The Tribunal should not lightly deprive employees of a pay equity adjustment, and particularly not in circumstances where, through no fault of the employee, it is the lateness of the payment that causes or contributes to the dispute. See Notre Dame of St. Agatha Inc. v. Tucker, [2001] O.P.E.D. No. 1 at para. 17.

[21] Where a statute imposes a duty of a positive kind, an estoppel cannot be raised to release a party from complying with the statutory obligation. The duty of each party is to obey the law. To accept a private contract which purported to release a party from its positive obligations under a statute would be tantamount to allowing private parties to repeal the statute in the particular case. This is clearly contrary to public policy. See Re Leisure World Nursing Homes Ltd. and Director of Employment Standards, supra.

[22] I do not accept the submissions of the applicant that Ms. McKinley is estopped from accepting any benefits that might ultimately accrue from the Tribunal’s decision.

DISPOSITION

[23] As I stated earlier in these Reasons, I would dismiss this appeal.

Pitt J.

Released: January 24, 2005

COURT FILE NO.: 717/03

DATE: 20050124

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

FERRIER, CRANE, PITT JJ.

B E T W E E N:

BUCYRUS BLADES OF CANADA LIMITED

Applicant

and –

EVELYN McKINLEY and PAY EQUITY HEARINGS TRIBUNAL

Respondent

REASONS FOR JUDGMENT

CRANE J.

DSC/sh

Released: January 24, 2005