PAY EQUITY HEARINGS TRIBUNAL

0719-01 Pioneer Youth Services (Toronto) Inc., Applicant v. Ontario Public Service Employees Union and Non-Union Employees of the Employer, Respondents

Before: Patricia DeGuire, Vice-Chair, and Members Pauline R. Seville and Yvonne Blaszczyk

Appearances: Paul Hensel for the Applicant; Victoria Réaume for the Respondent Union; no one appearing for the Non-Union Employees

Cite as: Pioneer Youth Services (Toronto) Inc., (February 26, 2002) 0719-01 (P.E.H.T.)

DECISION OF THE TRIBUNAL, May 30, 2002

(issued orally February 26, 2002)

1. Pioneer Youth Services (Toronto) Inc. brings this Application to the Tribunal concerning a Review Officer’s Order dated September 27, 2000: (“Order”). The Review Officer found the Applicant is a public sector employer and declared that it is a seeking employer for the purpose of using the proxy method of comparison according to Part III.2 of the Pay Equity Act, R.S.O. 1990, c, P.7, as amended: (“Act”). At the conclusion of the hearing on February 26, 2002, the Tribunal issued an oral ruling dismissing the Application and indicated that its written reasons would follow.

ISSUE

2. Is the Applicant a “public sector employer” such that it can be found to be a “seeking employer” for the purpose of using the proxy method of comparison according to Part III.2 of the Act?

3. The Applicant states it “is a private per diem Operator, providing care and treatment to up to 33 children and youth in four residential group home settings.” It states that it is a not a non-profit or transfer payment agency. As such, the Applicant asserted that “I can shut down this service with seven days notice to service purchasers e.g. CAS, believe the government cannot”. The Applicant further states: “...in our opinion Pioneer Youth Services (Toronto) Inc. is a private sector employer with less than 100 employees.” The Applicant asks the Tribunal to rescind the Order.

4. At the hearing the parties agreed that the Applicant operates children’s residences under the authority of licences issued under the Child and Family Services Act, R.S.O. 1990, c. C. 11, as amended. The Applicant entered into evidence Exhibit 1, four licences issued by the Ministry of Community and Social Services. These licences indicate that the Applicant is indeed licensed to operate children’s residence under the authority of the Child and Family Services Act and the regulations.

REASONS

The Legislative Scheme

5. Part III.2 of the Act sets out the proxy method of job comparison. Subsection

21.12(2) provides as follows:

21.12(2) A review officer may make an order declaring an employer to be a seeking employer if the employer has given notice to the Pay Equity Office under subsection 21.2(5) and if the review officer finds,

(a) that the employer is a public sector employer; and

(b) that there is any female job class within the employer’s establishment that cannot be compared to a male job class within the establishment under either the job-to-job method of comparison or the proportional value method of comparison.

6. Unlike the Applicant in Regesh Child and Family Services (January 22, 2002 0735-01 PEHT), the Applicant does not acknowledge that it is a public sector employer for the purposes of the Act. It concedes, however, that its residences are licensed under the Child and Family Services Act, supra. Thus, the Tribunal must determine whether the Applicant is a “public sector employer” such that it can be found to be a “seeking employer.”

7. In Helen Henderson (No.4), (December 17, 2001 0626-96, 0631-97, 0632-97, 0633-97, 0655-97 PEHT), the Tribunal discussed the Act’s approach to the distinction between public and private sector in some detail.

8. It is useful at this point to look at how the rest of the Act deals with the distinction between the public and the private sector. First of all, the Tribunal notes that an employer’s character as public or private sector determines the scope of the obligations imposed on that employer by the Act:

all public sector employers must comply with the Act, but the legislation does not apply to private sector employers with fewer than ten employees ss.3(1));

all public sector employers must implement pay equity through the vehicle of pay equity plans, but only large private sector employers must prepare such plans (s. 11 and s. 13);

public sector employers must commence paying pay equity adjustments under those plans sooner than private sector employers ss.12(2));

the Act imposes a deadline by which all public sector employers must achieve pay equity, whereas private sector employers may take longer to achieve pay equity as long as they annually devote the statutorily-specified minimum amount of payroll to this goal ss. 12(7)); and

only public sector employers are required to use the proxy method of evaluation set out in Part III.2 of the Act.

63. Subsection 1(1) of the Act defines private and public sector as follows:

"private sector" means all of the employers who are not in the public sector

“public sector" means all of the employers who are referred to in the Schedule

64. By defining the terms in this way, and by distinguishing so clearly between the obligations imposed on “public sector” employers as compared to “private sector” employers, the Act does two things. First, it sets up a binary: the scheme of the legislation presupposes that an employer will fall neatly within one or the other of these sectors. It does not contemplate the existence of “hybrid” employers. Second, it establishes a hierarchy of inquiries that must be made in determining whether an entity falls within the private or the public sector. Because “private sector” is defined negatively, this definitional exercise requires one to see if an employer falls within a category listed in the Schedule. If so, the employer is public sector. If not, it is private sector.

65. The Applicants’ suggestion that the question the Tribunal must answer in resolving these Applications is whether proxy can be extended to the private sector is thus fundamentally at odds with the hierarchy of inquiries that the Act dictates. It is also not very helpful in the absence of any other authoritative definitional source of what constitutes the public sector versus the private sector, particularly where that term is not a term of art, and other judicial decisions grappling with the distinction have firmly grounded their analyses in the language of the statutes in question rather than on some overriding popular understanding of these terms. The two cases summarized in the following paragraphs illustrate this latter point.

66. Reibin v Canada (Treasury Board), [1996] F.C.J. No. 794 (F.C.T.D.), dealt with whether the operations, and hence the employees, of the Whitehorse General Hospital had been “privatized” within the meaning of the federal Treasury Board’s Workforce Adjustment Directive, or whether they had instead “devolved” to another public sector employer. The functions in question had been transferred to the Yukon General Hospital. Here the adjudicator whose decision was under review was held by the court to have acted reasonably in examining the terms of the Directive; looking to the plain meaning of private sector; considering the statutory regulation of the Yukon General Hospital; and finally concluding that it was part of the public sector despite an express statutory provisions stating that it was “not an institution of the Government of the Yukon.”

67. The second case standing for the proposition that issues of “private” and “public” sector are dependent on the language of the statute in question is British Columbia Assn. of Private Care v British Columbia (Attorney General), [1996] B.C.J. No. 497 (B.C.S.C.). This case arose out of the 1993 enactment of The Public Sector Employers Act, S.B.C. 1993, c. 65, which authorized the making of regulations designating employers for the purposes of the definition of “Public Sector Employer”. The crux of the case before the Court is set out in paragraphs 3 and 4 of the decision:

By Regulation made under the statute, certain private care facilities and agencies were declared to be members of an organization known as the Health Employers Association of British Columbia (HEABC) and were placed in the same category as government-funded entities. I was told that approximately 115 private health care facilities and agencies that would obtain a large portion of their revenues from the provision of health care services to the government on a contract basis were by this Regulation placed in the HEABC. The petitioners here take issue with that Regulation claiming that it was inappropriate to lump them in with “public sector” entities.

The Court noted the significant degree to which the private health care facilities were dependent on contracts to provide services to the government in dismissing the petition to strike down the Regulation as ultra vires legislation aimed at the public sector. For the purposes of other statutes in British Columbia, however, these facilities may well have been treated as part of the private sector.

68. The Applicants relied on the case of Miles Estate v. Canada, [1999] T.C.J. No. 535, where nursing homes and retirement homes were held to be distinct kinds of operations for the purposes of the Income Tax Act, supra, with the consequence that only fees payable to the former constituted deductible medical expenses. The Applicants also relied on the similarities between the Act and its Schedule and the Social Contract Act, 1993, supra, and the Schedule thereto. The Tribunal acknowledges that the language of the two legislative regimes is identical with respect to the provisions identifying the operators of nursing homes as part of the public sector. The fact that the Applicants negotiated plans to achieve savings under the Social Contract Act, 1993, supra, in respect of their Nursing Homes alone, however, is not, in the absence of a judicial decision, dispositive of whether they properly excluded the Retirement Homes. Finally, the Applicants relied on the statutory ambit of pay equity legislation in other Canadian jurisdictions, which extends only to the public sector, and submitted that Retirement Homes were not captured by that legislation.

69. The Unions relied on the fact that both the Retirement Homes and the Nursing Homes have been declared to be “hospitals” for the purposes of HLDAA, supra.

70. The Tribunal does not find that the treatment of nursing homes and retirement homes under these other statutory regimes offers it much assistance in interpreting the Act. The Tribunal sees its task as determining what constitutes the public sector for the purposes of the Act, and particularly the issue of whether Retirement Homes that are part of Retirement Communities are in the public sector. Because we are focussing on the Act and its provisions, the fact that other statutes may either distinguish between Retirement Homes and Nursing Homes or may treat them similarly does not really assist our analysis. We also note that the accepted principles of statutory interpretation only provide for resort to extraneous statutes in pari materia as aids to construction. For the second statute to be considered in pari materia, it must deal with the same subject matter as the first. This prerequisite is, in our view, satisfied only by HLDAA, supra, which is, like the Act, a statute of application to both the public and private sector and aimed at regulating labour relations.

(c) The Schedule to the Act

71. Although ss.21.12 (2) speaks to the requirement that a Review Officer “find” that an employer is public sector before issuing a “seeking employer” declaration, there is in fact very little scope under the Act for making any “findings”. The definition of public sector takes the form of a catalogue of entities, rather than a functional examination of the activities in which they engage. In other words, it is the identity of the employer itself, rather than the nature of the employer’s operations, which determines its identification as “public” or “private”.

72. Notwithstanding our observations in the preceding paragraph, we turn to examine briefly whether the Schedule could provide the Tribunal with any guidance in developing a functional definition of “public sector”, were this approach open to the Tribunal. Even a cursory review of the catalogue that constitutes the Appendix reveals that it would be exceedingly difficult to come up with a functional definition that would encompass all of the actors listed there, and would enable one to predict with any certainty what constitute “like actors”, and consequently fall within the purview of the public sector. Some are non-profit (a native friendship centre), and some are run on a for-profit basis (hospital laundry services). The operations of some appear to be highly regulated by statute (agencies and residential facilities under the Child and Family Services Act), while the operations of others appear subject to the barest statutory constraints (the Metro Toronto Convention Centre and the Royal Botanical Gardens). Some are created by statute (Metro Toronto Convention Centre) and some are not (sexual assault centres). Some are funded in whole by the government, and some only in part (adult community mental health service funded in whole or in part by the Ministry of Health). It is possible, indeed it is perhaps probable, that all of the entities listed in the Schedule obtain at least some of their operating funds from the provincial government, but this cannot be ascertained with certainty from the Schedule itself, or any other part of the Act. Nor is it possible to ascertain if the entities are in receipt of direct core funding or discretionary grants, or if their clients are subsidized rather than the agency being funded directly.

73. We therefore reject the possibility of developing for “public sector” the kind of jurisprudential functional definition that the Tribunal’s case law sets out for “employer”, even if it were appropriate to do so in the face of what purports to be an exhaustive statutory definition.

74. Turning then to the Act’s enumeration of the entities constituting the public sector, we find the following relevant provisions:

SCHEDULE

1. The public sector in Ontario consists of,

(i) any authority, board, commission, corporation, office, person or organization of persons, or any class of authorities, boards, commissions, corporations, offices, persons or organizations of persons, set out in the Appendix to this Schedule or added to the Appendix by the regulations made under this Act.

8. The Tribunal then went on to consider the provisions specific to the facts in dispute in Helen Henderson (No.4). For the purposes of this Application the following sections of the Appendix to the Schedule are relevant:

Ministry of Community and Social Services

1. Any corporation or organization of persons, other than one that has no employees other than employees who directly or indirectly control it, that,

(a) operates a children’s residence under the authority of a licence issued under clause 193(1)(a) of the Child and Family Services Act;

(b) operates a children’s residence under the authority of a licence issued under clause 193(1)(b) of the Child and Family Services Act unless the provider is a foster parent.

9. The Applicant agrees that its residences are operated pursuant to licences issued by the Ministry of Community and Social Services under the Child and Family Services Act. As such, the Applicant falls within the group defined as public sector employers for the purposes of pay equity contained in the Schedule to the Act.

10. For the reasons expressed in Helen Henderson (No.4) the Tribunal has no discretion to apply the definition of public sector employer in anything other than a categorical fashion. In the circumstances, then, the Application must fail and the Order is confirmed.

Dated at Toronto this 30th day of May, 2002.

Patricia DeGuire, Vice-Chair

Pauline R. Seville, Member

Yvonne Blazczyk, Member