PAY EQUITY HEARINGS TRIBUNAL
1812-06-PE Call-A-Service Inc./Harmony Hall Centre for Seniors Applicant v. An Anonymous Employee, Respondent
Before: Patricia E. DeGuire, Vice-Chair, Margaret Kvetan and Pauline R. Seville, Members
Appearances: Casey M. Picard, Counsel for Call-A-Service Inc./Harmony Hall Centre for Seniors
and David Lieberman
Cite as: Call-A-Service Inc./Harmony Hall Centre for Seniors (No. 3) (28 April, 2008),
1812-06 (P.E.H.T.)
DECISION OF THE TRIBUNAL: APRIL 28, 2008
I. INTRODUCTION
The Applicant, Call-A-Service Inc./Harmony Hall Centre for Seniors (the “Employer”), brings this Application under subsection 25(1) of the Pay Equity Act, R.S.O 1990, c. P.7 as amended (the “Act”). It challenges a Review Officer Order dated March 30, 2006 (the “Order”). The Employer asks the Tribunal for the following remedies: revoke the Order; issue a declaration that pay equity has been achieved for the Coordinator II and Driver job classes; and award costs associated with making this Application.
The Tribunal held a hearing where the Employer’s Executive Director, Mr. David Lieberman, led oral and documentary evidence. After the hearing, the Tribunal requested additional evidence from the Employer. Mr. Ronald Brown, a member of the Board of Directors of the establishment, submitted that evidence by way of an Affidavit. Based on the evidence, these are the Tribunal’s Decision and Reasons.
II. BACKGROUND
The Employer is a Broader Public Sector employer. It provides various services to senior citizens in East York, Greater Toronto Area. A 15-member Board of Directors—all volunteers—and the Executive Director manage this establishment. In October 2000, the Employer hired Mr. Lieberman, on a part-time basis, to fill the Executive Director position. That position was converted into a full-time position as at March 31, 2003. It is a one-member female job class.
All employees in this establishment are non-union.
In 1993, the Pay Equity Office issued an order under subsection 21.12(2) of the Act directing the Employer to use the proxy method of comparison to achieve pay equity within the meaning of subsection 21.15(1) of the Act. Using the True Davidson Home for the Aged as the proxy employer, the Employer prepared and posted a pay equity plan in 1994. There was no notice of objection filed against this plan. It became the deemed approved plan within the meaning of the Act. In 2002, the Employer could not find the 1994 plan, and prepared and posted a pay equity document on August 30, 2002 (the “2002 Plan”).
In February 2001, a former employee filed a complaint with the Pay Equity Office on behalf of a group of employees in the Bus Driver and Driver job classes. The employee alleged that the Employer had failed to make pay equity adjustments for the Bus Driver and Driver job classes. In February 2002, a group of employees filed a further complaint with the Pay Equity Office. They alleged that the Employer had not paid any pay equity adjustments and that their hourly wage rate had been reduced. The Review Officer who issued the Order in this Application also had settled those two complaints.
In February 2005, a third complaint was filed with the Pay Equity Office by an anonymous employee. The allegation is that the Employer had failed to implement the pay equity plan according to its terms, and that pay equity was not being maintained. The Review Officer’s disposition of that complaint resulted in the issuance of the Order that is challenged in this case.
In dealing with the February 2005 complaint, the Review Officer had considered the issue of whether the Employer contravened subsection 7(1) of the Act. Subsection 7(1) requires all employers to establish and maintain compensation practices that provide for pay equity.
The Review Officer’s Order
- The Review Officer concluded that the Employer had contravened subsection 7(1) of the Act, and accordingly, issued the Order under subsections 24(2) and 24(3) of the Act. For ease of reference, the directive part of the Order is reproduced below verbatim:
Repost the amended PLAN B, with the amendments clearly marked and the added schedule removed for 90,7 and 30 days within 60 days of this Order
Make retro adjustments of $1.36 to all past and present employees in the Casual Driver job class for all hours worked effective January 1, 1994 to current date for both past and current employees and adjust the current job rate to $13.75 within 60 days of this Order
Make retro adjustment to the Team Leader job class of $3.10 for all hours worked effective January 1, 2005 to current date and adjust the current job rate to $21.50 within 60 days of this Order.
Distribute the 1% of total payroll for future pay equity adjustments for the job classes of the Coordinator I, Bus Driver and Casual Bus Driver until pay equity is achieved. Other job classes having achieved pay equity.
Advise the Review Officer in writing with a summary statement of adjustment calculations to each affected past and current employee.
Within 60 days of this Order.
III. ISSUES
- In this case, the Tribunal considers whether the Employer has contravened subsection 7(1) of the Act. In answering that general question, the Tribunal addresses the following sub-issues, which appear to have been addressed by the Review Officer as well:
(i) Which document is the deemed approved plan within the meaning of the Act? In
answering this question the Tribunal will also determine whether there were “changed circumstances” within the meaning of subsection 14.2(1), which required the Employer to amend the deemed approved plan?
(ii) Can an employer introduce salary scales after the pay equity plan has been deemed
approved?
(iii) Was the $1.20 amount given to the Executive Director job class a non-pay equity increase?
(iv) Did the Employer distribute the 1% of its payroll for the preceding twelve-month period
according to the Act?
(v) What are the correct pay equity job rates for the Program Manager and Team Leader job
classes?
IV. DECISION AND DISPOSITION
- Based on all the evidence, the Tribunal finds that the 2002 Plan replaced the 1994 pay equity plan and became the deemed approved plan within the meaning of subsection 15(4) to (8) of the Act. An employer may implement salary scales in its establishment after the plan is deemed approved. However, that system must be consistent with the Act. In this case, the Employer had formally introduced salary scales as at May 30, 2003. That system was inconsistent with the Act. The Tribunal finds that the $1.20 hourly wage increase given to the Executive Director job class was a pay equity increase. It necessarily follows that the Employer failed to distribute the 1% of its payroll for the preceding twelve-month period according to subsection 13(3) of the Act. The Tribunal concludes that the correct pay equity job rates for the Program Manager and Team Leader Job classes are $23 and $21.50 respectively. Based on those findings, the Tribunal varies the Order.
V. FINDINGS OF FACT and ANALYSIS
- In this Decision, the term pay equity job rate means, in relation to a key female job class, the highest rate of compensation for a job class that would be required for that class, “if the job rate were to bear the same relationship to the value of the work performed in that class as the pay equity job rates for the female job classes in the proxy establishment with which the key female job class is compared in those female job classes in the proxy establishment”: clause 21(11)(b). The term pay equity adjusted wage rate means, the wage rate of the female job classes as at January 1, 1994, plus all the pay equity adjustments. The term target rate means a specific job rate towards which a female job class is moving to achieve pay equity.
(i) Which document is the deemed approved plan?
(a) The Employer’s Pay Equity Documents
The Tribunal accepts the Executive Director’s evidence that, with the assistance of the Review Officer, the Employer had prepared and posted the 2002 Plan on August 30, 2002, because the Employer was unable to locate its 1994 plan. The plan was required to help resolve a complaint filed by a group of employees in February 2002. The Tribunal is satisfied that no notice of objection was filed against the 2002 Plan within the meaning of subsections 14(8) and 15(4) to (8) of the Act. Therefore, the 2002 Plan “became deemed approved in accordance with the Act”, even though subsequently, the Employer found the 1994 plan.
Based on the evidence, the Tribunal is satisfied that when the 2002 Plan was implemented and posted, all retroactive pay equity adjustments owing were made to employees according to the Act, and those adjustments had been applied when determining the pay equity adjusted wage rate as at January 2003. Further, the Tribunal is satisfied that the 2002 Plan reflected adjustments up to January 1, 2004.
Having made that determination, the Tribunal considers next whether there were changed circumstances within the meaning of subsection 14.2(1), which would have rendered the 2002 Plan “no longer appropriate for the Employer’s establishment”, and thus, required the Employer to amend and repost it.
(b) Were there “changed circumstances” within the meaning of subsection 14.2(1), which required the Employer to amend and repost the deemed approved plan?
The Act permits the Employer, as a non-union establishment, unilaterally, to “amend the plan and post in the workplace a copy of the amended plan with the amendments clearly indicated”: subsection 14.2(1) of the Act. The Employer may do so if it “is of the view that because of changed circumstances in the establishment the pay equity plan for the establishment is no longer appropriate”: subsection 14.2(1). [Emphasis added]
The Executive Director’s evidence is that, “of necessity”, several changes within the Employer’s establishment required the Employer to make amendments to the pay equity plan and repost it. Those changes include the implementation of salary scales. These changes are considered separately to decide whether they constitute “changed circumstances” so that the 2002 Plan was no longer appropriate for the establishment and thus, warranted an amendment to and reposting of it. In addition, the Tribunal considers the history of the Employer’s pay equity documents, which it has led into evidence. The documents include the 2002 Plan; a document signed and posted on February 10, 2003; a document signed and dated May 30, 2003, which is referred to as “Plan A”; and a document signed and dated April 16, 2004, which is referred to as “Plan B”.
(1) Changing the Job Title of the Administrative Coordinator/ Program Manager Job Class
- The evidence shows that the Administrative Coordinator or Program Manager is a one-member job class. The Tribunal accepts Mr. Lieberman’s evidence that the Employer had changed the job title from “Administrative Coordinator” to “Program Manager” and amended the plan to reflect that change. The Tribunal finds that merely changing the job title does not constitute changed circumstances to render the 2002 Plan inappropriate for the establishment.
(2) Changes to the wage rate and duties of the Transportation & Office Assistant Job Class
- At another time, the Employer had amended the wage rate of the Transportation & Office Assistant job class. Mr. Lieberman admits that the wage rate for the said job class was reduced. In addition, the duties and responsibilities of that job class were amended. The Tribunal accepts the Executive Director’s evidence that the Review Officer, who issued the Order in this Application, also had determined that the Employer’s action to change the wage rate and duties of the Transportation & Office Assistant job class was a violation of the Act and had settled that complaint. Further, the Tribunal accepts the Employer’s evidence that it had amended and reposted the 2002 Plan because of the changes the Employer had made to the duties and responsibilities of the said job class. The Tribunal finds that those changes do not constitute changed circumstances to render the 2002 Plan inappropriate for the establishment.
(3) Filling the Team Leader Job Class
- The Employer had amended the plan upon filling the Team Leader job class. The Team Leader job class is a one-member job class that was created in July 2002. The Employer had listed it in the 2002 Plan, but that job class was not listed in the February 10, 2003 pay equity document. The Tribunal concludes that, filling the Team Leader job class was not the type of changed circumstances, which required an amendment and reposting of a deemed approved plan. It is apposite to note that a job class does not cease to exist merely because it is vacant temporarily. A temporarily vacant job class should continue to be listed in the plan as long as it exists.
(4) Does introducing salary scales constitute “changed circumstances” within the meaning of the Act?
- The Tribunal emphasises that neither the Act nor its jurisprudence requires an employer to have salary scales as part of its pay equity plan or part of its ongoing pay equity obligations. A formal system to determine salary scales might be helpful in the efficacy of maintaining pay equity. However, in implementing such a scheme, an employer shall not, in purpose or effect, introduce salary scales, which are contrary to the Act. That means methods and processes including all calculations, must conform to the purpose and scheme of the Act to ensure that pay equity is maintained. That said, the Tribunal concludes that implementing salary scales are not changed circumstances within the meaning of subsection 14.2(1) of the Act. Thus, the Tribunal finds that in this case the introduction of salary scales did not render the 2002 Plan inappropriate to warrant amending or reposting it.
(5) The April 16, 2004 Pay Equity Document “PLAN B”
In the Order, the Review Officer directed the Employer to repost the April 16, 2004 pay equity document. During the hearing, the panel asked the Executive Director why the Employer had amended and reposted a deemed approved plan. His response was that the Review Officer had “ordered” him to post a plan every year. Looking at the evidentiary documents, it is possible that the Employer had amended the plan at that point to reflect that the Coordinator II job class had achieved pay equity, or when the position in Team Leader job class was filled. However, those occurrences are maintenance changes and not changed circumstances within the meaning of subsection 14.2(1) of the Act. Moreover, there is no evidence before the Tribunal to justify substituting “Plan B” for the 2002 Plan, which is the deemed approved plan.
To be clear, the February 10, 2003 pay equity document, the May 30, 2003 pay equity document and the April 16, 2004 pay equity document were not deemed approved plans within the meaning of the Act. Adding formal salary scales to the pay equity plan of this establishment is not a changed circumstance under the Act to warrant the amendment and reposting of a deemed approved plan.
Maintenance and Changed Circumstances re a Deemed Approved Plan
During the hearing, the Tribunal heard evidence from the Employer’s Executive Director that on several occasions the Employer had “amended and reposted” a pay equity document because of changes in its establishment. It seems that from time to time, the Employer had viewed those changes sufficient to render its deemed approved plan to be “no longer appropriate” for the establishment, and thus proceeded to amend, repost, and re-implement another pay equity plan. In the wake of that, it is apposite to set out the differences between changes that come about because of maintenance and changed circumstances.
Maintenance is the means by which an employer ensures that compensation practices are kept up-to-date and remain consistent with pay equity principles. Subsection 7(1) of the Act imposes an obligation on an employer to establish and “maintain” compensation practices that provide for pay equity. Maintenance is an ongoing responsibility. It includes reviewing job classes regularly to capture any changes to job duties and responsibilities, which may require pay equity adjustments. Some examples of changes resulting from ongoing maintenance are: changes to job titles; changes to the duties and responsibilities of a job that may place it in a different job class and salary scale; the creation or elimination of a job class, in particular, a male comparator job class; and changes in the gender dominance.
Changes arising from maintenance do not give rise to a formal review period as required under subsections 15(4) to (8) of the Act.
Most significantly though, such changes do not open a deemed approved plan. (Centennial College (2001 – 02), 12 P.E.R. 102, at para. 20. To paraphrase the ruling of the panel in that case, the importance of a deemed approved plan makes it counter-intuitive to the scheme of the Act to contemplate treating subsequent events, as rendering a deemed approved plan open.
By contrast, in the case of a non-union establishment, subsections 14.2 of the Act permits an employer where, “because of changed circumstances in the establishment the pay equity plan … is no longer appropriate” to amend and repost a deemed approved plan. Essentially, the changed circumstances would render a “deemed approved plan” not workable.
The Act does not define the term “changed circumstances”. It is clear, however, that the existing plan must be “no longer appropriate” for the establishment. Implicitly, in changed circumstances, the Employer must prepare and implement a new pay equity plan because the existing one is no longer suitable for the establishment. Some examples of changed circumstances could be: restructuring of the establishment; the certification of a union in a non-union establishment; and the amalgamation or merger of two or more employers. (Parry Sound District General Hospital (No. 2) (1996), 7 P.E.R. 73; and St. Joseph’s Villa (1993), P.E.R. 33). To paraphrase the panel in Parry Sound, it would be counter-intuitive to enact a provision permitting one to challenge a deemed approved plan that contravenes the Act, and then immediately below, permit one to challenge a deemed approve plan each time there are revisions: para. 28.
In this case, having examined the changes, the Tribunal iterates its conclusion that none of the changes the Employer relied on in this case to amend and repost the 2002 Plan, are changed circumstances sufficient to require amending and reposting that plan. Those changes are integral to the Employer’s responsibility to maintain compensations practices that are consistent with pay equity as contemplated by subsection 7(1) of the Act.
(ii) Can the Employer introduce salary scales after the plan had been deemed approved?
- This question has incidental relevance to at least two sub-issues: the correct job rates for at least two job classes, and whether the Employer had distributed the 1% of the payroll for the preceding twelve-month period consistent with the Act.
(a) Did the Employer establish formal salary scales? If so, when?
Mr. Lieberman asserts that when the 2002 Plan was posted, the Employer had already implemented salary scales. He asserts that he had introduced them on January 1, 2001, after becoming the Executive Director. Having reviewed the documents entered into evidence to support this assertion, the Tribunal concludes that only one document, a facsimile to the Review Officer dated May 29, 2003, correlates to the pay equity plan. In the said facsimile, the Executive Director states: “As promised, I am sending you a copy of the draft salary scales for Harmony Hall.” The “draft salary scales” is an undated document with the titles of job classes: Program Manager, Coordinator I, Coordinator II, Bus Driver and Casual Driver. Under each job title, there is a four-step scale ranging from the lowest to the highest wage rate. Similar figures are recorded in the document dated May 30, 2003, which both the Employer and the Review Officer refer to as “Plan A”. That is the only difference between the pay equity documents dated February 10, 2003 and May 30, 2003; both documents bear a signature “D. Lieberman”.
Having reviewed and compared the evidentiary documents, the Tribunal concludes that the Employer introduced a formal salary scale system in its establishment as at May 30, 2003; that was after the 2002 Plan had been deemed approved. More than likely, a problem resulting from a formal salary scale scheme would be a maintenance issue.
Having made that determination, it is necessary for the Tribunal to decide whether the Employer’s salary scales are consistent with the Act.
(b) Are the Employer’s salary scales consistent with the Act?
Until May 30, 2003, the Employer had an informal single-rate-of-pay structure in its establishment. There were no predefined salary scales. Non-pay equity increases were sporadic and largely depended upon external grants or funding for such increases. The Tribunal has perused several documents, which the Employer has entered into evidence, including the pay equity documents and salary scales dated February 10, 2003, May 30, 2003 and April 16, 2004 pay equity documents. From those documents the Tribunal has prepared a chart, (“Appendix A”), which may be helpful in understanding this sub-issue. In those documents, the Employer sets out the steps of the salary scales. Significant observations are annotated with superscripted numbers.
From those documents—Tables 1 and 2 of Appendix A—the Tribunal makes the following observations:
(i) There are no salary scales for the Executive Director female job class.
(ii) Team Leader is a new one-member female job class created in July 2002. Yet, it was listed as a key female job class in the 2002 Plan with a $3.50 pay equity adjustment. It was not listed in the May 30, 2003 document, but was listed in the April 16, 2004 document with a $3.10 pay equity adjustment. The hourly wage for all the steps in the salary scales for this job class is below the pay equity job rate.
(iii) In a letter to “Anne” dated December 20, 2002—a document entered into evidence by the Employer—the pay equity job rate for the Coordinator II job class is $17.85 after adding the July 2002 to December 2002 adjustments. The hourly wage for every step in the salary scales for the Coordinator II job class is below the pay equity job rate even though this job class has achieved pay equity. Unlike the Coordinator II job class, no salary scales have been set for the Driver job class that has achieved pay equity.
(iv) Except for the Executive Director and the Driver job classes, every step in the salary scales for all female job classes listed is below the pay equity target rate or the pay equity adjusted wage rate.
(v) The pay equity target rate for the Administrative Coordinator/Program Manager job class was reduced from $23 to $21.50.
The foregoing observations raise concerns. The Employer’s evidence shed light on what the Employer had set sights on when it introduced salary scales in its establishment. The Executive Director asserts that he had introduced salary scales to the Board of Directors because everywhere he had worked had them. He claims that in doing so, all “incumbents” were paid “the maximum pay equity adjusted rate”. When asked by the Panel why the Employer had introduced salary scales, the Executive Director states: “We were thinking that new hires could come in at a lower rate”: By inference, setting the hourly wage rate below the pay equity adjusted wage rate would save the Employer money.
An inference from the documentary and oral evidence is that the Employer is of the view that as long as it pays the “incumbents” the “maximum pay equity adjusted rate”, setting the steps in the salary scales below the pay equity adjusted wage rate or the pay equity job rate does not violate the Act. It seems the Employer believes that the achievement of pay equity applies to the “incumbents” or the employees in a job class as opposed to ensuring that the pay equity job rate for a female job class achieves pay equity. As is evident in this case, such a view may lead to policies, processes, and results, which violate the Act.
On the question of setting proper steps in the salary scales, counsel for the Employer submits that the Tribunal’s jurisprudence does not deal squarely with this sub-issue. The Tribunal agrees. Further, she argues that the inference from the case law is that an Employer may introduce salary scales as long as they affect no one adversely. Counsel relies on Glengarry Memorial Hospital v. Ontario Nurses’ Association, [1992] O.P.E.D. No. 16; Gloucester (No. 2) (1992), 2 P.E.R. 208; and Brant Haldimand Norfolk Catholic District School Board (13 April 2006) (P.E.H.T.).
In addition, counsel submits that when an Employer is working towards achieving pay equity, the jurisprudence states that the steps below the pay equity target rate must receive proportional pay equity adjustments. Counsel further submits that in this case, where the “steps are set below the achieved or targeted [job] rate, everyone has the opportunity to work towards a higher rate” as long as the person received pay equity increases. Therefore, applying pay equity adjustments to the pay equity target rate and then adjusting each step below it, at the same rate, does not violate the Act. The Tribunal does not agree that such inferences may be drawn from its jurisprudence.
By inference, there seems to be a conflation of two different notions. On the one hand, setting steps in salary scales when working to achieve pay equity and when pay equity has been achieved; on the other hand, the Employer’s right to set up formal salary scales and set a proportional relationship between the salary steps. The latter point was addressed in Brant Haldimand. Setting steps in salary scales for a job class that has not achieved pay equity and setting steps for a job class that has achieved pay equity or a new female job class that does not fit into an existing female job class likely will yield different results.
Indeed, where a job class is working towards achieving pay equity, steps in salary scales may be set below the pay equity target rate. It does not matter whether the employer works backward from the pay equity target rate. The employer must not, however, set the first step below the pay equity adjusted wage rate. Applying that principle to this case, using the Program Manager job class as an example, the highest step in the job class would be $23, which was the pay equity target rate at that time. Thus, if as at May 30, 2003, the pay equity adjusted wage rate was $19.55, the first step of the salary scales must be $19.55.
In the case where the job class has achieved pay equity, or is a new female job class that does not fit into an existing job class, the first step in the salary scales should be the pay equity job rate. Applying that principle to this case, using the Team Leader job class, the first step of the salary scales should be $21.50, which was the pay equity rate at that time. That is because the Team Leader job class was created after January 1, 1994. For the Driver job class, the first step of the salary scales should be $15 because that job class has achieved pay equity.
The Tribunal is not persuaded that the Employer did not know it was contravening the Act by intentionally setting steps in its salary scales below the pay equity adjusted wage rate or the pay equity job rate in the appropriate circumstances. The record shows that in a previous complaint, the Employer had hired a new Bus Driver and paid an hourly wage rate below the pay equity job rate. In that case, the Review Officer had determined that the Employer’s actions had violated the Act and ordered the Employer to increase the new employee’s hourly wage rate to that of the incumbents and make retroactive payment. The Employer had complied.
The pay equity job rate and the pay equity adjusted wage rate for a female job class are tantamount to a pay equity minimum wage. In more practical terms, if the Employer is allowed to set salary scales below the pay equity adjusted wage rate or the pay equity job rate, an employer may be able to terminate its employees and replace them with “new hires”, for example, at the provincial minimum wage, with impunity. An effect of such a practice is that in year two, the statutory minimum of 1% of the payroll for the previous twelve-month period would be less. Therefore, the amount required for pay equity adjustments would be reduced—delaying the achievement of pay equity—ultimately, undermining a key objective of the Act. Essentially, that would be allowing indirectly what subsections 9(1) and 13(11) prohibit. That is because it is the job rate of the female job class that must be adjusted to achieve pay equity.
Believing that one can set the salary scales below the pay equity adjusted wage rate or the pay equity job rate, as the case may be, is a fiction. Doing so is deliberately paying an inequitable rate: a clear violation of subsections 9(1) and 13(11) of the Act. When an employer sets steps incorrectly, by setting steps below the pay equity job rate, a wage gap may be created. The employer must close this gap immediately by making full payment of the deficiency. That deficiency is not a retroactive adjustment. Therefore, the Employer must not use any of the minimum 1% of payroll for the preceding twelve-month period mandated by law to fill the gap: Law Society (No. 2) (1998-99), 9 P.E.R. 35. When an Employer sets steps in the salary scales incorrectly, by setting its first step below the pay equity adjusted wage rate, it reduces the compensation rates for positions, which is inconsistent with subsection 9(1) of the Act.
To summarise, the Tribunal concludes that the Employer’s salary scales are inconsistent with the Act. As noted in paragraph 36(iv) above, except for the Executive Director and the Driver job classes, every step of the salary scales for all the female job classes is below the pay equity job rate or the pay equity adjusted wage rate. As a result of setting steps below the pay equity adjusted wage rate and the pay equity job rate, the compensation rates for positions have been reduced, and a wage gap has been created in a female job class, respectively. That is contrary to subsection 9(1) and 13(11) of the Act. Indeed, as a non-union establishment, the Employer may introduce salary scales after the pay equity plan had been deemed approved. The Employer may set as few or as many steps it deems necessary in its salary scales. It may work backwards from the pay equity target rate, but the first step in the salary scales shall not be below the pay equity adjusted wage rate or the pay equity job rate where appropriate.
(iii) Was the $1.20 given to the Executive Director job class a non-pay equity increase?
In a document dated April 16, 2004, which the Employer states and the Review Officer accepted as the “deemed approved Plan B”, the Executive Director job class, which is a female job class, requires a $3.85 adjustment. In a document dated May 30, 2003 (“Plan A”), that job class requires a $5.20 adjustment. By calculation, the Executive Director job class has received a $1.35 adjustment ($5.20 - $3.85 = $1.35). The Executive Director’s evidence is that the $1.20 was a non-pay equity increase. He asserts that adding the $1.20, as a pay equity adjustment was an error; the correct pay equity adjustment should be $0.15.
Mr. Lieberman’s testimony is that when he became the full-time Executive Director, his hours of work increased from 30 to 35 hours per week and his wages increased to $32 per hour. He enters a handwritten document into evidence to support that assertion. Further, he asserts that a $1.20 per-hour wage increase had been recommended by the Personnel Committee—a committee of the Board of Directors—and, subsequently approved by the Board at a regular meeting. His testimony was not supported by any documentary evidence, for example, the Minutes of the Board meeting where the said motion was passed.
During the hearing the Panel had advised Mr. Lieberman that it might be necessary to call him back to give further evidence. As it turned out, the Panel determined that it required more information on this issue. Mr. Lieberman’s evidence is critical to this substantive issue. Ordinarily, the Panel would have allowed him to adduce evidence about the logistics and classification of the $1.20 increase. Therefore, in a Decision dated October 26, 2007, the Tribunal directed the Employer to provide more evidence about its decision to give increases to the Executive Director job class.
In response to the Tribunal’s direction, the Employer adduced an Affidavit, sworn November 12, 2007, by the affiant, Ronald Brown. He states that at that time, he was a member of the Board of Directors and held the Secretary/Treasurer post, as well as Chair of the Personnel Committee. The affiant prepared the Minutes of the March 19 and March 26, 2003 Board meetings. He declares that on March 19, 2003, during a Personnel Committee meeting, a motion was passed to give “a one-time merit increase of $1.20 to the Executive Director” job class effective April 2, 2003: Affidavit, para. 2. He claims that recommendation was carried forward to a regular Board of Directors’ meeting on March 26, 2003, where it was approved: Ibid. para. 3.
In addition, the affiant swears that the Executive Director’s job class was not provided with a $1.20 per hour wage increase every year. He asserts that often, the only pay increase for any job class was the annual pay equity adjustment required under the Pay Equity Act. The affiant states that there is no record to confirm that such a motion had been put forward or passed by the Board of Directors in the March 26, 2003 meeting. He does not explain why the motion was not recorded in the Minutes.
The Affidavit with attachments of the affiant, Ronald Brown, was sent to the Tribunal’s Registrar by counsel for the Employer. The Tribunal has not received any submissions from the Employer’s counsel on that documentary evidence.
The contents of a document the Affiant included with his Affidavit entitled “David Lieberman – Salary Increases 2003 to 2007”, contradict his statement that the $1.20 was a one-time merit increase. That document shows that in March 2003, Mr. Lieberman received a $1.20 merit increase; in 2004 and 2005 he received $1.70 merit increase for those years. The pay equity adjustments were $0.15. This is somewhat consistent with the documentary evidence entered at the hearing.
An undated manual payroll record the Employer entered into evidence shows two compensation rates for the Executive Director position: $30.80 and $32 per hour. The Employer’s automated payroll record for the period ending April 12, 2004, which was also led into evidence, indicates that the hourly compensation rate was $32.15. The difference is $1.35: ($32.15 - $30.80). For the period ending January 20, 2005, the hourly compensation rate was $34, which is $1.85 more than the previous rate. For the period ending January 19, 2006, the compensation rate was $34.90, which is $0.90 more than the last rate. This documentary evidence does not support the claim of a one-time non-pay equity raise, with a $0.15 pay equity adjustment annually.
The Executive Director’s evidence and the affiant’s deposition are contradictory in their justification for the logistics and classification of the $1.20 increase. The Tribunal cannot accept their evidence. It is not reliable. On the balance, the evidence does not support the Employer’s position that the $1.20 was a merit increase or a one-time merit increase. The Employer has the onus to prove this sub-issue; it has not met that burden. Therefore, based on the evidence, the Tribunal finds that the increase of $1.20 was a pay equity increase.
(iv) Did the Employer distribute the 1% of its payroll for the preceding twelve-month period according to the Act?
The answer to this sub-issue flows from the foregoing determination. Having found that the $1.20 was a pay equity increase, the corollary is, the Employer had not distributed the 1% of its payroll for the preceding twelve-month period according to the Act.
The distribution of the 1% of the Employer’s payroll for the preceding twelve-month period must be done correctly. Every job class that has not achieved pay equity must receive an adjustment. Every employee in the same job class must get the same dollar adjustment. The lowest paid female job class must receive the greater dollar adjustment. All other job classes may each receive the same or different amount, but that amount must be less than that received by the lowest paid female job class. This method of distribution must continue until the pay equity adjusted wage rate for the lowest paid female job class is the same, as the lesser of, the pay equity target rate and the pay equity adjusted wage rate of the next lowest job rate. (See subsection 13(3)).
According to the evidence, the Casual Driver job class, the lowest paid female job class, was allotted $0.16 pay equity adjustment. All the other job classes that have not achieved pay equity received $0.15. Based on the findings, the Executive Director job class received $1.35. Therefore, the Tribunal finds that the Employer has failed to distribute the 1% of its payroll for the preceding twelve-month period according to the Act.
(v) What are the correct pay equity job rates for the Team Leader and the Program Manager job classes?
(a) The Team Leader Job Class
The documentary evidence indicates that the Team Leader job class was created in July 2002. It is a one-member job class. The Employer concedes that the pay equity job rate for the Team Leader job class was $21.50 at that time.
The Executive Director asserts that the Team Leader job class was vacant temporarily and not listed in some of its pay equity documents. Notionally, however, the Employer had allotted pay equity adjustments to that job class. The Tribunal cannot accept this evidence. As a new job class created after January 1, 1994, the pay equity job rate is $21.50. It must be paid immediately: 21.11(1). The fact that this job class was delisted temporarily does not give rise to retroactive adjustments. There should not be a $3.10 retroactive adjustment as shown in the Employer’s evidentiary document dated April 16, 2004. As stated in paragraph 20 above, a job class does not cease to exist because it is vacant temporarily. At all times, it should be listed in the plan until the job class no longer exists. Thus, when the position was filled the job rate still should have been $21.50. Therefore, the difference in the compensation rate, which resulted from that error, must be paid at once retroactive from the appropriate date.
(b) The Program Manager Job Class
- The Employer concedes that the pay equity job rate for the Program Manager job class was $23. The Employer states that recording the pay equity job rate, as $21.50 per hour on the pay equity plan was an error. The Tribunal accepts this explanation.
VI. CONCLUSION
- Based on the evidence, the Tribunal concludes that the Employer has contravened subsection 7(1) of the Act. It has failed to establish and maintain compensation practices that provide for pay equity. Further, the Tribunal finds that the plan dated August 30, 2002 is the deemed approved plan.
VII. ORDER
- Accordingly, the Order is varied. The Tribunal directs the Employer to:
(a) For the purpose of information, post a copy of the August 30, 2002 deemed approved plan in the workplace within 24 hours of the date of this Decision.
(b) Provide each present and past employee a copy of this Decision and the deemed approved plan dated August 30, 2002, within 30 days of this Decision.
(c) Make retroactive pay equity adjustments of $1.36 to all past and present employees in the Casual Driver job class for all hours worked effective January 1, 1994 to current date and adjust the current job rate to $13.75 within 60 days of this Decision.
(d) Pay the $3.10 wage gap in the Team Leader job class for all hours worked from January 1, 2005 to the present. Adjust the job rate to $21.50. The adjustment must not be taken from the 1% of the Employer’s payroll for the preceding twelve-month period. Payment must be paid within 60 days of this Decision.
(e) For future pay equity adjustments, distribute the 1% of the Employer’s payroll for the preceding twelve-month period to the Coordinator I, Bus Driver and Casual Bus Driver job classes until pay equity is achieved.
(f) Provide the Review Officer, in writing, a summary statement of pay equity adjustment calculations for each affected past and current employee within 60 days of this Decision.
(g) Pre-judgement Interest should be calculated in the following manner as set out in Pay Equity Hearings Tribunal decision: Royal Crest Lifecare Group (No. 5) (November 18, 2002), at paragraph #17:
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.
Dated at Toronto, Ontario this 28^th^ day of April, 2008.
“Patricia E. DeGuire”_________
Patricia E. DeGuire, Vice-Chair
“Margaret Kvetan”__________
Margaret Kvetan, Member
“Pauline R. Seville”__________
Pauline R. Seville, Member
APPENDIX A
Table 1
seeking employer (CALL-A-SERVICE/HARMONY HALL)
Deemed Approved Plan posted February 10, 2003
May 30, 2003 Document Identified as “Plan A”
Four-step Salary scales in Plan A
Female Job Classes
Pay equity Target Rate
Adjustment
Female Job Classes of Plan A
Pay equity Target Rate
Step 1
Step 2
Step 3
Step 4
Executive Director
Program Manager
Coordinator I
Coordinator II
Bus Driver
Driver
Casual Driver
36.00
23.00
20.00
17.69^2
15.70
15.00
14.00
5.20
3.45
2.15
0.64
0.54
NIL
2.10
Executive Director^1 Program Manager
Coordinator I
Coordinator II
Bus Driver
Driver
Casual Driver
23.00
20.00
17.69^3
15.70
15.00
14.00
18.20
16.50
15.70^4
12.60
NIL
10.55
18.65
16.95
16.15^4
13.45
NIL
11.00
19.10
17.40
16.60^4
14.30
NIL
11.45
19.55
17.85
17.05
15.16
NIL
11.90
Table 2
seeking employer (CALL-A-SERVICE/HARMONY HALL)
April 16, 2004 Document Identified as “Plan B”
Four-step Salary scales
Female Job Classes of Plan B
Amended Pay equity Target Rate
Amended
Adjustment
Pay equity Target Rate
Step 1
Step 2
Step 3
Step 4
Executive Director^1 Admin Coordinator
Team Leader^2
Coordinator I
Coordinator II
Bus Driver
Driver
Casual Driver
36.00
21.50
21.50
20.00
17.69^5
15.70
15.00
14.00
3.85
3.45
3.10^3
2.00
NIL
0.39
NIL
1.94
23.00
20.00
17.69
15.70
15.00
14.00
18.05
18.05^4
16.75
15.85^6
12.75
NIL
10.71
18.40
18.40^4
17.10
16.30^6
13.60
NIL
11.16
18.75
18.75^4
17.55
16.75^6
14.45
NIL
11.61
19.10
19.10^4
18.00
17.69^6
15.31
NIL
12.06
There are no salary scales for this female job classes.
This new female job class was created in July 2002 and was included in the 2002 Plan. It was not in Document “Plan A” in 2003. It was added
to Document “Plan B” in 2004.
There should not be any pay equity adjustment. The hourly wage for all the steps is below the pay equity job rate.
Notably, the hourly wage for each step is below the pay equity job rate even though this is a new job class.
Exhibit 1 Tab 12 indicates that the pay equity adjusted wage rate after adding July 2002 to December 2002 adjustments was $17.85. According to Exhibit 1 Tab 12, the pay equity target rate is $17.69.
Each step in the salary scales is below the pay equity job rate even though pay equity has been achieved.
