Pay Equity Hearings Tribunal
0721-01 Royal Crest Lifecare Group Applicant v. Mandy Warner, Lora Monaco and Wendy Loback Respondents
Before: Mary Ellen Cummings, Chair; Margaret Kvetan and Pauline R. Seville, Members.
Appearances: Sandra Majic, Donna Spasic, Evelyn MacDonald, Pat Dewyk and Walter Squazzin for the Applicant; Wendy Lobek, Lora Monaco, Mandy Warner and Linda Hickey for the Respondents
Cite As: Royal Crest Lifecare Group (No.5) (November 18, 2002) 0721-01 (P.E.H.T.)
DECISION OF THE TRIBUNAL, NOVEMBER 18, 2002
1Royal Crest Lifecare Group (the "Employer" or the "Applicant") brought an Application with respect to a Review Officer's Order dated June 21, 2000. The Order concluded that the Applicant had not made the pay equity adjustments required in the pay equity plans it had posted for non-union staff in the eleven nursing homes it operates in June 1995.
2Through an interim decision dated June 12, 2001 the Tribunal limited the issues that could be raised before it to whether or not the Employer had made the pay equity adjustments required under the identical pay equity plans it posted in each of its 11 workplaces in June 1995. There is no dispute that these pay equity plans required the Employer to adjust the job rate of each female job class by $1.50. The Employer's position as set out in its Application is:
The adjustments cited in the Commission's Order fail to parallel the negotiated and approved Pay Equity Plans and further fail to acknowledge that all requisite pay equity monies have been distributed to the intended recipients, which recipients have further signed acknowledgements.
3The majority of the evidence that the Tribunal found relevant to the issue before it was led by Donna Spasic, the Employer's President of Operations. Ms. Spasic testified that shortly after the pay equity plans were posted, concerns were raised by Administrators in each of the Employer's nursing homes about the plans. Questions were raised about the Employer's stated intentions in the plan to make pay equity adjustments available "...as soon as practical following receipt of the special funding". The Employer's intention was to make payments if and when it received funding, which Ms. Spasic explained, left employees with no certainty. In addition, she explained, some Administrators expressed the view that the comparator that had been used to determine the amount of the pay adjustment was inappropriate. Ms. Spasic was also concerned that some of the wages they were paying were not competitive when compared with similar nursing homes in the community. Finally, Ms. Spasic had noted that there were inconsistencies in the payment of similar positions across the various homes that were not justified.
4Out of concern for these anomalies and the view expressed by the Administrators about the appropriateness of the posted pay equity plans, Ms. Spasic undertook a re-evaluation of the wages paid for all positions in all homes and created new wage grids. These grids were intended to address concerns about competitiveness within the industry and internal equity. In addition, the Employer undertook to pay the wages set out on these wage grids without waiting to see if the Employer would receive funding to make pay equity adjustments. Ms. Spasic believed that the process the Employer undertook was responsive to the views of employees as expressed by the Administrators. Ms. Spasic also said that when the Employer went forward with the new wage grids, it was doing so with the agreement of the non-union employees. Ms. Spasic testified that she understood that the Administrators "spoke for" or "represented" the non-union employees and so considered any agreements she reached with the Administrators in each home to be the product of a "negotiation" with the non-union employees.
5In some facilities the new wage grids were called "salaries/wage schedule" ;in others they were called "pay equity wage grids". Ms. Spasic testified that in implementing the "pay equity wage grids" the Employer was providing a greater benefit than contemplated under the pay equity plans posted because the Employer was addressing internal equity issues and promising to make wage adjustments regardless of whether it received special pay equity funding from the government. Ms. Spasic testified that new pay equity plans were posted in homes, or rather that she directed the Administrators to post the plans, which reflected the implementation of the new "pay equity wage grids". Ms Spasic could not explain why some of the Respondent employees had seen no posting in their workplaces and were not aware that their Administrators had agreed to the new plans on their behalf.
6Further, the Employer generated documents for the Tribunal to attempt to show that the monies paid out to employees by way of the "pay equity wage grids" were in excess of the amounts that would have been paid under the pay equity plans that are the subject of the Order. Pat Dewyk, the Employer's payroll supervisor, testified that in each year, the Employer traditionally gave a cost of living adjustment of 1%. Ms. Dewyk oversaw the preparation of documents which were intended to track the increases given to employees from January 1, 1994. In preparing the documents, the Employer assumed that 1% of any increase was on account of cost of living adjustments, with the remainder treated as a "pay equity adjustment", owing to the implementation of the new "pay equity wage grids". The wage grids set out a start rate; 1 year rate; 2 year rate; 3 year rate, 5 year rate and 7 year rate for each classification in each home. Employees were then placed on the grids. Some were earning amounts in excess of the spot they were placed on the grid, in which case they were red-circled. Others were paid a rate less than the rate that would otherwise apply. Ms. Spasic and two nursing home Administrators testified that situation would occur if the Employer did not think that the incumbent was fully skilled or if he or she did not receive a completely satisfactory performance review. Ms. Spasic explained that the wage grids were intended as a guide; a corporate statement of the salary to be paid to a fully skilled person with good performance.
7In reviewing the payroll records, that is the records of what people were actually paid, and comparing them with the wage grids, Ms. Dewyk was able to show that in a number of instances, incumbents were paid the rate that matched their job title and grid placement, based on their seniority in the position, but there were a number of anomalies that could not be explained. The Respondents provided copies of their pay stubs, and in a number of instances, they showed that they did not receive remuneration consistent with their job title and years of experience.
8Ms. Dewyk testified that she was not aware of any document that would establish that the Employer dedicated 1% of its payroll in each year to making pay equity adjustments in accordance with the Pay Equity Act R.S.O. 1990, c. P-7 (the Act). While the Employer can estimate what amounts were spent on cost of living adjustments, the remaining amounts were paid to all other employees regardless of whether they were in a female job class or a male job class.
9Assuming for the moment that Ms. Spasic, on behalf of the Employer, undertook a rethinking of the pay equity plan in 1996 in good faith, she did so without any regard for the Act. The Employer had been identified as a broader public sector Employer who was not able to find male comparators for all of its female job classes through either the job-to-job or proportional value method. The Employer was identified as a seeking Employer, required to use the proxy method of job comparison. The initial pay equity plans posted by the Employer in June 1995 indicated that the proxy methodology had been used and identified that the job class of health care aide had been selected as the key female job class to be used as the basis for comparison, which was then compared to the identical job class in the proxy establishment. The Tribunal understands from Ms. Spasic that this was the methodology used by the Employer (and a number of other nursing home Employers) in their pay equity negotiations with bargaining agents representing their unionized staff. Ms. Spasic testified that on the advice of their consultant, the Employer decided to apply the same outcome to the non-union staff, with the result that, as in the unionized plans, the job rates of female job classes would be adjusted by $1.50.
10But the Employer did not implement that posted plan, and instead, decided to reconfigure its compensation system and call it pay equity. The Act has precise methodologies and precise criteria that are to be applied. It is not open to Employers to devise their own principles and measures. The proxy comparison system is particularly prescriptive. The provisions are set out in subsections 21.11 to 21.23 of the Act. At the risk of oversimplifying the process, a seeking Employer must select a proxy comparator organization, in accordance with the Act; identify a key female job class or job classes, and send a description of their duties to the proxy Employer; receive the relevant information from the proxy Employer; evaluate the key female job classes and the proxy Employer's female job classes using a gender neutral comparison system; develop a job rate line; determine the adjustments and post the proxy plan. While it appears that the Employer undertook that exercise before posting its June 1995 pay equity plans, the process of re-evaluation Ms. Spasic describes taking place in 1996 bears no relation to the requirements of the Act. Moreover, in the 1996 plan, the amount of pay adjustments was said to span the amount "0" to $1.50. On the applicant's own evidence, the Tribunal concludes that the re-evaluation undertaken in 1996 does not comply with the Act.
11Whatever the Employer may have done in 1996 was done entirely outside the Act and with no apparent regard for the Act. In those circumstances it is immaterial if the Employer thought the Administrators spoke for the employees or if some of the employees accepted the Employer's course of action. Other employees did complain that the Employer had not paid out the adjustments set out in the June 1995 plans, resulting in the Order of the Review Officer that forms the basis of this Application.
12It is also immaterial that the Employer has spent some money in making adjustments that it called "pay equity adjustments". The Tribunal is satisfied that the Employer has not paid out the adjustments required in the plans it posted in June 1995. The sums it did pay out to some employees were a consequence of internal restructuring and realignment of compensation practices. An Employer is free to do that, but it cannot do so in a manner that it inconsistent with the Act. Moreover, and most important for this case, an Employer cannot re-configure its compensation practices, label the exercise "pay equity" and thus avoid making the pay equity adjustments required under its pay equity plans that were posted in compliance with the Act.
13The Applicant has not satisfied the Tribunal that it should revoke the Order of the Review Officer dated June 21, 2000. In accordance with section 25(2)(d), the Tribunal confirms the Order of the Officer.
Disposition
14The Tribunal directs the Employer to calculate the amount of the pay equity adjustment that is owing to each current and former non-union employee and the interest thereon, and provide a copy of the calculation to the Respondents and the Tribunal within 90 days of this decision. The Employer must also provide information about the actual salary paid to each employee, expressed as an hourly rate. We will then order the amount to be paid to each individual.
15The Employer is directed to calculate the following amounts for current and former non-union employees, in all but the lowest paid female job class, at each of its 11 facilities for each hour worked in each year, up to the date which is 90 days from the date of this decision:
1994 46c
1995 91c
1996 $1.40
1997 $1.50
1998 $1.50
1999 $1.50
2000 $1.50
2001 $1.50
2002 $1.50
16The Employer is directed to calculate the following amounts to current and former non-union employees in the lowest paid female job class, at each of its 11 facilities for each hour worked in each year, up to the date which is 90 days from the date of this decision:
1994 47c
1995 92c
1996 $1.41
1997 $1.50
1998 $1.50
1999 $1.50
2000 $1.50
2001 $1.50
2002 $1.50
17The Employer is directed to pay interest on the amounts owing to employees. Interest is to be calculated in accordance with the principles set out in Hallowell House Ltd., [1980] OLRB Rep. Jan 35, which has been followed and applied by the Tribunal (see, for example Peterborough (Clow) (No. 3) (1996), 7 P.E.R. 33). After calculating the amount owed to each employee or former employee, the amount is divided in half and the rate of interest as prescribed in section 127 of the Courts of Justice Act, R.S.O, 1990, c.C43 is to be applied from January 1, 1994, the date the pay equity adjustments should have been implemented. This is a rough and ready interest calculation, taking into account that the total amount would not have been received at once. The Ontario Gazette prescribes the rate for the first quarter of 1994 as 4.3%. Consequently, the Employer must pay interest at the rate of 4.3%, calculated on half of the amount owed to each person, from January 1, 1994.
18As of the date of implementation of this decision, the job rate for each female job class is adjusted by the addition of $1.50 per hour.
19The Employer is directed to post this decision in its workplaces in locations where it is likely to come to the attention of affected employees. Since many of the affected employees have left the workplace, the Employer is directed to forward a copy of this decision to former employees at their last known address.
20The Tribunal will stay seized to deal with any implementation issues.
Dated at Toronto this 18th day of November, 2002.
____________________________________
Mary Ellen Cummings, Chair
____________________________________
Margaret Kvetan, Member
____________________________________
Pauline R. Seville, Member