Stevenson Memorial Hospital v. Ontario Public Service Employees Union, Local 360, 2000 CanLII 22419

PAY EQUITY HEARINGS TRIBUNAL

PE 0677-98 Stevenson Memorial Hospital, Applicant v. Ontario Public Service Employees Union, Local 360, Respondent

Appearances: Janice Baker for the Applicant; Victoria Reaume for the Respondent

Before: Katherine Laird, Vice-Chair and Margaret Kvetan and Pauline Seville, Members

Cite As: Stevenson Memorial Hospital

DECISION OF THE TRIBUNAL, FEBRUARY 24, 2000

INTRODUCTION

1In this application, Stevenson Memorial Hospital ("Stevenson") seeks to have the Tribunal revoke an Order of a Review Officer, dated March 25, 1998. The Review Officer Order required Stevenson to adjust the job rate of the Registered Nursing Assistant ("RNA") job class, (currently referred to as Registered Practical Nurses), to equal that of its male comparator in the Pay Equity Plan, the Ambulance Attendant ("AA") job class. The Ontario Public Service Employees Union, Local 360 ("OPSEU") represents the bargaining unit containing both the RNA and AA job classes and opposes Stevenson's application.

FACTUAL BACKGROUND

2The facts in this case are not in dispute. Pursuant to its statutory obligations, Stevenson posted a Pay Equity Plan effective January 1, 1990. Stevenson was not a unionized workplace at the time the Plan was posted. All pay equity adjustments required by the Plan were completed within the first year. Consequently, by January 1, 1991, the RNA job class had achieved an adjusted job rate equal to that of its male comparator, the AA job class.

3On September 6, 1991, OPSEU became certified as the exclusive bargaining agent for Stevenson employees, including the RNAs and AAs. First contract negotiations resulted in the parties proceeding to binding interest arbitration on several issues, including wages, pursuant to the Hospital Labour Disputes Arbitration Act, R.S.O. 1990, c.H.14.

4In submissions before Arbitrator Douglas C. Stanley, OPSEU sought a general wage increase for classifications other than AAs and RNAs, of 7% in the first year and 4% in each of the two succeeding years. With respect to AAs, the union sought, and achieved, a rate of pay equivalent to that paid to their counterparts employed by the Ministry of Health. This amounted to approximately an 11% increase in the first year, and 1% and 2% in the two succeeding years. The goal of wage parity with Ontario Public Service ("OPS") ambulance attendants was pursued by OPSEU, together with the other unions (Service Employees International Union and Canadian Union of Public Employees) representing non-OPS ambulance attendants throughout the province, in collective bargaining and at arbitration, with particular success between 1989 and 1993.

5In its submissions to the Arbitrator, OPSEU noted that the AA job class was the comparator for the RNA job class. It was OPSEU's position that any increase awarded to the former, if not also awarded to the latter, would be sought in subsequent negotiations or through the Pay Equity Commission.

6In the Stanley Award, released May 2, 1993, the RNAs were given the same general wage increase as all employees other than AAs: 1% in the first year; 2% in the second year. No reasons were given and the pay equity implications were not discussed or referenced in the decision. The arbitration award created a wage gap between the RNAs and the AAs of $1.82 per hour.

THE ISSUE

7The issue in dispute is whether or not Stevenson is required to eliminate the wage gap between the RNA and AA job classes that was created by the Stanley Award. Stevenson claims that s.8(2) of the Pay Equity Act, R.S.O.1990, c.P.7, as amended, (the "Act"), permits a difference in compensation between a female and male job class which emerges after pay equity has been achieved and as a result of differences in "bargaining strength". OPSEU takes the position that s.8(2) does not apply to the circumstances of this case.

ORDER

8The Review Officer Order is upheld in its result, on different grounds. Stevenson is required to adjust the job rate of the RNA job class to the job rate of the AA job class.

RELEVANT STATUTORY AND REGULATORY PROVISIONS

PAY EQUITY ACT

8.(1) Exceptions. This Act does not apply so as to prevent differences in compensation between a female job class and a male job class if the employer is able to show that the difference is the result of,

(a) a formal seniority system that does not discriminate on the basis of gender;

(b) a temporary employee training or development assignment that is equally available to male and female employees and that leads to career advancement for those involved in the program;

(c) a merit compensation plan that is based on formal performance ratings and that has been brought to the attention of the employees and that does not discriminate on the basis of gender;

(d) the personnel practice known as red-circling, where, based on a gender-neutral re-evaluation process, the value of a position has been down-graded and the compensation of the incumbent employee has been frozen or his or her increases in compensation have been curtailed until the compensation for the down-graded position is equivalent to or greater than the compensation payable to the incumbent; or

(e) a skills shortage that is causing a temporary inflation in compensation because the employer is encountering difficulties in recruiting employees with the requisite skills for positions in the job class.

8.(2) Idem. After pay equity has been achieved in an establishment, this Act does not apply so as to prevent differences in compensation between a female job class and a male job class if the employer is able to show that the difference is the result of differences in bargaining strength.

8.(5) Limitation re maintaining pay equity. The requirement that an employer maintain pay equity for a female job class is subject to such limitations as may be prescribed in the regulations. 1993, c. 4, s. 6.

36.(1) Regulations. The Lieutenant Governor in Council may make regulations,

(f) prescribing criteria that shall be taken into account in deciding whether or not a difference in compensation between a female job class and a male job class is a difference that is permitted by subsection 8 (1) or (2);

(f.1) prescribing limitations on the requirement that an employer maintain pay equity for a female job class;

36.(2)Retroactivity. A regulation made under clause (1) (f.1) is, if it so provides, effective with reference to a period before it was filed.

ONTARIO REGULATION 491/93

LIMITATIONS ON MAINTAINING PAY EQUITY

1. The requirement to maintain pay equity for any female job class is limited in the manner prescribed in this Regulation where,

(a) a male job class has been used as the basis of a job-to-job comparison to a female job class in a pay equity plan; and

(b) the compensation for that male job is increased as a result of a decision of an arbitrator or other tribunal other than a decision that results from the failure of the parties to a collective agreement to reach an agreement in the course of bargaining for a collective agreement or the renewal of one.

REVIEW SERVICES ORDER

9In the paragraph below, the order set out reasons for determining that the wage gap between the RNA and the AA job classes did not come within the exception in s.8(2).

From the evidence presented, I find that the Employer failed to demonstrate that the wages awarded to the Ambulance Attendants were due to their bargaining strength. Rather I find that the wages awarded to the Ambulance Attendants were due to market conditions.

SUBMISSIONS OF THE HOSPITAL

10Counsel for Stevenson challenged the assumption of the Review Officer that "market conditions" could be distinguished, in the circumstances of the present case, from "bargaining strength". She submitted that, in interpreting s.8(2), it was necessary to start from the premise that the exception is intended to apply to some real life situations. She suggested the following as examples of circumstances in which an employee group might be said to have greater comparative "bargaining strength":

• if the employee group performs an essential service;
• if there is a labour shortage with respect to the skills of the group;
• if the employer has "deep pockets" (eg. taxation power);
• if the employee group has significant financial resources going into collective bargaining (or interest arbitration) or has a particularly large number of members; and
• if the employer's financial situation or market position make it particularly vulnerable to work stoppages or disruptions.

11Counsel for Stevenson submitted that the exception in s.8(2) should apply in the present case on the basis that the male comparator AA job class was able to make a more compelling case at arbitration because its members were performing work which was rewarded with a significantly higher wage in other establishments across the province.

12With respect to Regulation 491/93, counsel for Stevenson submitted that it applied where a male and female job class, that had been paired in a pay equity plan, were no longer comparable. The Regulation was not, in her submission, applicable in this case because the male and female jobs remained comparable for pay equity purposes.

SUBMISSIONS OF OPSEU

13Counsel for OPSEU submitted that the Tribunal should not decide what the words "bargaining strength" in s.8(2) mean, only what the words cannot mean in the circumstances of the present case. It was OPSEU's position that the "bargaining strength" exception cannot mean that a wage gap is to be permitted to re-emerge between a female job class and its comparator in the same bargaining unit simply because the male job class has greater negotiating strength, for whatever reason. If, after pay equity is achieved, the wage rate of a female job class is allowed to fall behind that of a male comparator in the same bargaining unit, because of a difference in "bargaining strength", the effect would be, in counsel's words, "to sanction the very distinctions within the bargaining unit which the legislation prohibits" and to "gut" the maintenance provisions of the Act.

14Secondly, counsel for OPSEU argued that the comparison of "bargaining strength" which triggers the legislative exemption in s.8(2) cannot be interpreted to include a favourable negotiating position enjoyed by a male comparator job class because of its position as part of a broader occupational group with particular bargaining clout in the labour market at the relevant point in time.

15Counsel submitted that the Act requires a consideration of "bargaining strength" when jobs are initially compared in the development of a plan, but not thereafter. Once job classes have been linked in a posted plan, an employer is required to maintain pay equity. In OPSEU's submission, s.8(2) cannot mean that a female job class can be found to have lost comparability under a plan simply because a wage increase has been awarded to its comparator by an interest arbitrator.

16Finally, OPSEU relied on s.1(b) of Regulation 491/93, brought into force in September 1993. Section 1(b) explicitly excludes increases gained at interest arbitration from the exception delineated in the Regulation. In the union's submission, s.1(b) of the Regulation should be applied in interpreting s.8(2) to specifically exclude interest arbitration awards from the "bargaining strength" exception.

ANALYSIS

17As was acknowledged by both counsel, Tribunal jurisprudence is only of limited assistance in interpreting the scope of the "bargaining strength" exception in s.8(2). The exceptions in s.8(1) have been considered in three Tribunal decisions, but those decisions are not helpful in this case except to confirm that exceptions to the statute are to be construed narrowly and that the onus is on the party claiming the exemption: Law Society(No.2)(1998-99), 9 P.E.R. 35; BICC Phillips (1997), 8 P.E.R.142; and Welland County General Hospital (1994), 5 P.E.R.12. Section 8(2) was considered in York Region Board of Education (1995), 6 P.E.R. 3, but was found not to apply to the facts in that case on the basis that pay equity had not yet been achieved in the establishment.

18In approaching the interpretation of s.8(2), we must consider the plain meaning of the words in the context of the stated purpose of the legislation. The Act contains a preamble and a statement of purpose (s.4(1)) which establish that the statute was enacted to "redress gender discrimination in the compensation of employees employed in female job classes in Ontario". Section 8(2) must be interpreted in a manner that is consistent with the overall purpose of the pay equity legislation. In accordance with the general principles for the interpretation of anti-discrimination statutes, the equality rights enshrined in the legislation must receive a liberal interpretation, while exceptions, such as s.8(2), must be narrowly construed: Insurance Corporation of B.C. v. Heerspink 1982 CanLII 27 (SCC), [1982] 2 S.C.R. 145. The exceptions in s.8 must be considered in the context of the entitlement scheme established by the Act, including the on-going responsibility, set out in s.7, to maintain those entitlements. As well, subsection (2) should be considered in the context of the other exceptions and limitations set out in the section; we should look for an interpretation of the subsection that is not inconsistent with the section as a whole.

19We also accept the submission of counsel for OPSEU that Regulation 491/93 may be examined for its consistency with one or more possible interpretations of the legislation. However, caution should be applied in considering regulations introduced in 1993 as an aid to interpreting s.8(2).¹ Regulation 491/93 was brought in following the enactment of s.8(5), s.36(1)(f.1) and s.36(2) in the package of statutory amendments proclaimed in July 1993. The Regulation has the heading "LIMITATIONS ON MAINTAINING PAY EQUITY" and its language tracks the wording of s.8(5), and not s.8(1) or (2).

20Section 8 is found in Part I of the Act, which has the heading "GENERAL", and includes the definition section, interpretive provisions, as well as the sections establishing the application, scope and purpose of the Act. Section 8(1) has the heading "Exceptions", while s.8(2), as well as (3) and (4), are headed "Idem" and, accordingly, are also to be considered as "exceptions". This can be contrasted with s.8(5), which has the heading "'Limitations re maintaining pay equity". To the limited extent that it is permissible to consider headings in interpreting statutes, we note that the use of the word "Exceptions", as a heading for subsections (1), (2), (3) and (4), indicates that these provisions deal with circumstances which are removed from the ambit of at least one aspect of the legislative scheme.

21However, if it had been the legislative intent, in enacting s.8(1) and (2), to exempt an employer and union from their responsibility under s.7 to establish and maintain pay equity for a female job class, in the circumstances enumerated in ss.(1), or in the case of ss.(2), where "bargaining strength" had re-created a wage gap, it would have been an easy matter to so provide in clear statutory language. Instead, s.8 directs that in particular circumstances, a difference in compensation between a female and a male job class is not prevented by the application of the Act. In both subsections, the onus is placed on the employer to establish that the triggering circumstances are present, but the statute does not state that an employer who can make the case is not required to establish or maintain pay equity for the affected female job class, only that the particular wage gap caused by the stated factors is not prevented by the application of the Act. Unfortunately, the statute gives no assistance to how s.7 and s.8 are to fit together in practice. Although s.36(1)(f) of the Act sets out regulation-making power with respect to s.8(1) and (2), no regulations have been passed under this section.

22What are the triggering circumstances that are necessary to support an employer's claim for a s.8(2) exemption? The wording requires a comparison of "bargaining strength" as between the female job class and the male job class that are experiencing "differences in compensation". The word "difference", when used in the singular in the subsection, refers back to "differences in compensation". The employer has to show that the "differences in compensation" between the two job classes are because of "differences in bargaining strength" between the two job classes. As a practical matter, it would necessarily be the greater bargaining power of the male job class which would trigger the possible application of the section.

23The phrase "bargaining strength" is not defined in the legislation and does not appear in any other section. The phrase has not been interpreted definitively in pay equity or labour relations jurisprudence. In every other instance in which the word "bargaining" appears in the Act, it modifies either the word "agent" or the word "unit". A definition of "bargaining agent" is included in s.1(1) of the Act:

"bargaining agent" means a trade union as defined in the Labour Relations Act that has the status of exclusive bargaining agent under that Act in respect of any bargaining unit or units in an establishment and includes an organization representing employees to whom this Act applies where such organization has exclusive bargaining rights under any other Act in respect of such employees.

24On the basis that the word "bargaining" in this Act is used consistently with reference to the collective bargaining regime, we are persuaded that the phrase "bargaining strength" in s.8(2) must refer to the strength exercised by a bargaining agent on behalf of a bargaining unit. Accordingly, the minimum conditions for the potential application of s.8(2) would be a situation in which:

• a male comparator job class had achieved a wage increase not also achieved by its related female job class under the plan; and
• the increase had been achieved through the negotiating efforts of a bargaining agent acting on behalf of the bargaining unit of which the male job class is a member.

An employer relying on s.8(2) would have to show that the wage increase is, in fact, "the result" of the bargaining strength exercised by the bargaining agent for the male job class, and not caused by some other factor, including gender discrimination. We can set aside, at least at this point, the issue of whether s.8(2) requires that the "bargaining strength" at issue be exercised in contract negotiations or whether it could have been brought to bear in interest arbitration, as in the present case.

25On this interpretation, an employer might claim this exception if the female job class was in a different bargaining unit from its male comparator and had achieved a lower increase, arguably because of inferior bargaining strength on the part of its bargaining agent. An employer might also claim this exception if the female job class was non-unionized, and had achieved a lower increase, arguably because it lacked the bargaining strength exercised by the bargaining agent for the unionized employees in the male job class. Neither of these scenarios is before us in this case and we do not have to decide if, in fact, s.8(2) is broad enough to cover both those situations.

26The issue presented by this case is whether s.8(2) can apply when a wage gap is re-created between job classes in the same bargaining unit. In other words, where a single bargaining agent, representing a bargaining unit containing a female job class and its male comparator, demonstrates greater negotiating strength on behalf of the male job class and, as a result, achieves a higher increase for the male job class, is the resulting wage gap within the scope of the exception created by s.8(2)?

27On the facts of the present case, it is not disputed that OPSEU was able to make a stronger case on behalf of the AAs, at the bargaining table and before the arbitrator, than it was able to make on behalf of the RNAs. This was because wage rates comparable to OPS rates had been achieved for ambulance attendants at other establishments across the province, in contract negotiations and through interest arbitration, particularly following a decision of the Ontario Public Service Labour Relations Tribunal finding that the ambulance attendants at a non-hospital ambulance service were Crown employees within the meaning of the Public Service Act, R.S.O. 1990, c.P-47: OPSEU v. Ministry of Health and McKechnie Ambulance Services Inc., January 26, 1989. OPSEU had a strong argument to make on behalf of the AAs in wage negotiations, because of the momentum created by the achievement of parity at other establishments, and because of the tendency in interest arbitration to give weight to comparability arguments. When negotiations failed, OPSEU made the parity argument strongly and successfully before Arbitrator Stanley.

28However, in our view, the fact that OPSEU could make a stronger wage parity case for the AAs is not what is intended to be captured by the phrase "differences in bargaining strength" in s.8(2). Pay equity legislation cannot be interpreted outside of the wider legislative environment governing labour relations in Ontario. An interpretation of "bargaining strength" which contemplated power comparisons as between occupational groups within a bargaining unit would be jarring in the context of the collective bargaining regime. Moreover, such an interpretation would be contrary to the common usage of the phrase "bargaining strength". The words "bargaining strength" are used to refer to the power exercised by a bargaining agent on behalf of all members of a bargaining unit, not power which is parceled out unevenly between different occupational groups within the membership.

29We have also considered the possible impact of applying the broader interpretation of the exception relied upon by the respondent. If s.8(2) did permit wage gaps to develop between female job classes and their male comparators within the same bargaining unit, based on "differences in the bargaining strength", pay equity in many establishments could be reversed in the first round of collective bargaining following its achievement. Any pay advantage negotiated on behalf of a male comparator could immediately be claimed by the employer to be the result of "differences in bargaining strength". Unlike the limited and defined exceptions in s.8(1), on this interpretation of s.8(2), an employer could attempt to rely simply on the wage gap itself as proof of the requisite differential in "bargaining strength". Section 8(2), if interpreted and applied this broadly, could in many workplaces undercut the stated purpose of the entire legislative scheme.

30In our view, the narrower interpretation of the exception is supported by a consideration of the probable purpose of the exception. In the context of the legislative scheme, what is most probably the undesired result, or 'evil', that the exception was created to prevent? In our view, s.8(2) appears to be designed to achieve a better fit between pay equity maintenance requirements and the on-going collective bargaining process in unionized workplaces. Tribunal jurisprudence has noted that the Act recognizes and accommodates the structure and process of collective bargaining in the province: Haldimand-Norfolk (No. 3)(1989), 1 P.E.R. 17 at 32; Middlesex and London (1989), 1 P.E.R. 89 at 102; Welland County General Hospital, supra at 20-21. In the absence of a provision like s.8(2), the employees in female job classes, who are in different bargaining units from their male comparators, could repeatedly make wage gains which reflect the bargaining strength of their male comparators in a different unit. Although gender discrimination could contribute to the bargaining strength of the male job class, it is also arguable, in the context of a post-pay equity workplace, that such a pattern of on-going matching wage increases for the female job class could not be justified as necessary to eliminate gender-based compensation discrimination. One negative impact of the absence of a provision like s.8(2), which might have been considered, would be the creation of internal wage inequities in a bargaining unit where some female job classes found inside comparators and some had to find comparators in other bargaining units with, for whatever reason, greater bargaining power.

31If s. 8(2) was designed to remove this automatic 'coattailing' effect of the pay equity legislation, and resulting inequities, it would have to be available when a female job class and its comparator are in different bargaining units. It might also be available where non-unionized employees in a female job class are compared to a male job class whose members are unionized. If, in either scenario, the bargaining agent for the male job class negotiates an increase that exceeds the rate achieved by its related female job class, the exception could apply if the wage gap could be shown to be the result of the "differences in bargaining strength". On this interpretation, s. 8(2) would allow the employer of the female job class, in one or both of these situations, to claim that the female job class is not automatically entitled to the same increases as are achieved by its male comparator through successive rounds of collective bargaining. However, this analysis does not support widening the interpretation of the exception to include the situation where the female job class and its comparator are in the same bargaining unit.

32For all of these reasons, we conclude that the "bargaining strength" exception has no application when a wage gap re-emerges between a female and male job class in the same bargaining unit after pay equity has been achieved. We are reinforced in our interpretation of s.8(2) by the related discussion in the Government of Ontario Green Paper on Pay Equity, tabled by the Minister Responsible for Women's Issues in November 1985. Although this paper was not relied upon by either counsel, we have considered it in order to understand the external context for this particular provision. The following passage, under the heading EFFECTS OF PAY EQUITY ON THE BARGAINING PROCESS, discusses the issues which we believe are addressed in s.8(2). We note that this discussion identifies "differences in bargaining power" as a potential pay equity issue in two situations: where comparisons are made between female and male job classes in different bargaining units; and where comparisons are made between non-unionized and unionized employees. There is no discussion of the situation where, as in this case, the female and male job classes are in the same bargaining unit.

A basic reason for joining unions is to achieve higher compensation and better working conditions than could be obtained individually, by taking advantage of the increased bargaining power of a group.

Differences in bargaining power can occur between bargaining units of the same employer. One bargaining unit may consist of employees performing jobs which are essential to the firm's operation, using skills not readily available in the labour market. Another bargaining unit may not have equivalent bargaining power, either because its activities are not as necessary to maintain day-to-day operation [sic] or because its skills are in plentiful supply.

Enhanced bargaining power could explain some of the wage gap between unionized and non-unionized employees, and between employees in different bargaining units, performing work of equal value. A difficulty with making allowances for this factor is the measurement of the wage differential due solely to relative bargaining power.

A fundamental issue which arises is the extent to which pay equity legislation would constrain the outcome of collective bargaining and affect the wage differential between bargaining units. For an establishment with more than one bargaining unit, differences in the general economic increase or in benefit improvements between bargaining units could cause divergences in pay for jobs which had been established as equal in value. The allowable exceptions referred to in Chapter III [seniority systems; performance rating systems; "red-circling"; training assignments; regional rates of pay; labour shortages] would be legitimate reasons for such divergences. Whether differences in bargaining power are acceptable reasons becomes an issue. If it is not possible to make allowances for bargaining power, to the extent that the pattern of establishing pay differences and closing them continues, there is a risk of a wage spiral. Alternatively, there might be pressures to amalgamate bargaining units or for joint bargaining.

Similar problems could occur with respect to employees inside a bargaining unit compared to non-unionized employees. If no divergence is permitted for bargaining power, after the initial pay equity adjustments, an employer might have to pay a substantial number of non-unionized employees according to the same scale as unionized employees. The union's negotiations then affect a much wider group of employees than the bargaining unit.

33Finally, having concluded that s.8(2) does not apply to the situation in this case, where the female and male job classes are in the same bargaining unit, there is no need to consider OPSEU's submission that Regulation 491/93 should be considered in applying s.8(2). We note that the Regulation, by its language, assumes that it will be applied in situations where a male and female job class are each represented by a bargaining agent, but it is silent on the question of whether or not the two job classes can be, or are assumed to be, in the same bargaining unit.

34We also note that our interpretation of s.8(2), as it applies to this case, appears to produce a result that is consistent with the Regulation although for different reasons. The Regulation establishes a method of limiting the requirement to make maintenance adjustments when the compensation of a male comparator job class has been increased by an arbitration decision. The section appears to apply to decisions arising out of classification grievances. Our factual situation would, arguably, be the 'exception to the exception', if you will, as set out in s. 1 (b) of the Regulation: where a male comparator gains an increase through interest arbitration. In this situation, the Regulation does not allow the employer of the related female job class to avoid paying the same increase as was achieved by the male comparator in the arbitration award. For the purposes of this decision, we do not have to determine whether the "bargaining strength" exception in s.8(2) can apply when the wage increase at issue is achieved by the male job class through an interest arbitration award, as in this case.

CONCLUSION

35The exception in s.8(2) of the Act does not apply to the present case. The section creates a limited exception where "differences in compensation" can be shown to be the result of "differences in bargaining strength", but has no application where the affected female and male job classes are in the same bargaining unit. Such an interpretation would be contrary to the commonly-held understanding of the phrase "bargaining strength" as used in the context of the labour relations environment in which the pay equity legislation operates. The narrower interpretation of s.8(2), which we adopt, undercuts the statutory purpose of redressing gender discrimination to a lesser degree than the interpretation proposed by the respondent, while also recognizing a secondary aspect of the legislative scheme, namely, the accommodation of the collective bargaining regime in which these parties function.

Footnotes

1. 1The 1993 amendments were proclaimed after the release of the Stanley Award. The retroactivity provision in s.36(2) of the Act, which applies to Regulation 491/93, would not appear to affect this case, in any event, based on the wording of s.3(4) of the Regulation.