Canadian Union of Public Employees v. The Corporation of the City of Peterborough, 2015 CanLII 55324

PAY EQUITY HEARINGS TRIBUNAL

PEHT Case No: 1581-14-PE

Canadian Union of Public Employees, Applicant v The Corporation of the City of Peterborough, Respondent

BEFORE: Patrick Kelly, Vice-Chair, Ann Burke and Irene Harris, Members

APPEARANCES: Steve Lillico, Alison Davidson, Lynda Bolton and Jeremy Bender appearing for the applicant; Lauri Reesor, Bob Kidd and Cathy Lloyd appearing for the responding party

DECISION OF VICE-CHAIR Patrick Kelly AND MEMBER Irene Harris: August 31, 2015

1. This is an application under the Pay Equity Act, R.S.O. 1990, c. P.7 as amended (“the Act”) in respect of an Order dated January 6, 2014 by Review Officer Gregory St. Pierre.

2. The matter proceeded by way of a hearing on April 23, 2015.

The Facts

3. The applicant, Canadian Union of Public Employees and its Local 126 (“Local 126”), and the respondent, Corporation of the City of Peterborough (“the City”) reached an agreed statement of facts (“the ASF”) for the purposes of the hearing in this matter. The parties elected not to call any evidence and argued their respective positions based upon the ASF.

4. The ASF reads as follows:

5. The Applicant, the Canadian Union of Public Employees and its Local 126 (“Local 126”) is the certified bargaining agent representing approximately 213 full time and 48 part time employees of the Respondent, the Corporation of the City of Peterborough (“the City”).

6. The City is a municipality in eastern Ontario and is the employer of approximately 1300 employees. The City is considered a Part II Public Sector Employer for the purposes of the Pay Equity Act (“the Act”).

7. The terms and conditions of employment for its members are set out in a collective agreement between the parties.

8. As required by the Act, the City and Local 126 negotiated a Pay Equity Plan dated September 29, 1992 which was deemed approved pursuant to the Act.

9. As a result of the Act’s subsequent amendment, the parties agreed on or about March 7, 1996 to amend the deemed approved Pay Equity Plan to include the proportional value method of comparison (“the 1996 Agreement”). The 1996 Agreement required that in the future wage lines be implemented as soon as possible after negotiations but did not further stipulate any future maintenance process for pay equity purposes.

10. The 1996 Agreement was replaced in 2003. On or about June 1, 2003, the City and Local 126 agreed to an Amended 2003 Proportional Value Plan for Local 126. The parties agreed that pay equity would be maintained using the proportional value method of comparison in accordance with Part III of the Act.

11. The Amended 2003 Proportional Value Plan does not state that certain male job classes will continue to be used for maintenance purposes. The Amended 2003 Proportional Value Plan does not create a joint maintenance process. The Amended 2003 Proportional Value Plan states the proportional value method will be used for the maintenance of pay equity in accordance with Part III of the Act.

12. The Amended 2003 Proportional Value Plan used all male comparators to generate a male wage line for comparison purposes. The Residential Mechanical Inspector (formerly called Building Inspector III) was included in generating the male wage line.

13. The Residential Mechanical Inspector was a new male job class in 2001 and thus was not previously used for pay equity comparison purposes.

14. The Amended 2003 Proportional Value Plan continued to use a modified Currie, Coopers and Lybrand gender neutral comparison system to evaluate male and female job classes within Local 126.

15. In or around 2004, the parties undertook a new gender neutral job evaluation exercise including internal equity for all bargaining unit job classes. As a result of that exercise, all job classes (male and female job classes) were evaluated and banded into the 12 “job class” bands that have existed since 1996. The negotiated gender neutral points bands for Local 126 are 45 points wide, set out in Schedule A to the collective agreement and as follows:

1 220 to 265 points

2 266 to 311 points

3 312 to 357 points

4 358 to 403 points

5 404 to 449 points

6 450 to 495 points

7 496 to 541 points

8 542 to 587 points

9 588 to 633 points

10 634 to 679 points

11 680 to 725 points

12 726 to 771 points

12. Each job class within a band receives the same rate of pay and benefits regardless of gender dominance. Each job class also receives the same negotiated increase each year as set out in the collective agreement, regardless of gender dominance. In specific cases identified in Schedule A to the collective agreement, an incumbent may get “pink circled” and receive the higher wage associated with the incumbent’s original job rating but any wage increase is based on the lower band in which the job has been re-evaluated and placed.

13. The Residential Mechanical Inspector was placed in band 10 as a result of this exercise between the parties.

14. It is this banding and compensation system that is now maintained between the parties, not the original proportional value line from the Amended 2003 Proportional Value Plan.

15. On or about July 8, 2011 the Residential Mechanical Inspector job class became vacant due to the incumbent’s resignation. The Residential Mechanical Inspector job class is a single incumbent job class.

16. Commencing in July 2011, the City attempted to recruit for the vacant position and posted a notice of vacancy for the position across various job websites and media outlets at the original job rate set out in the collective agreement. The City was unsuccessful in finding a qualified candidate for the job class.

17. On or about July 25, 2011, the City conducted an inter-jurisdictional market salary survey for municipalities across Ontario for job classes within the Building Services Decision at the City. The market survey revealed that the City’s original job rate set out in the collective agreement for the Residential Mechanical Inspector was lower than any other municipalities across Ontario. It was similarly noted that all Inspector positions in the Building Services Division were paid lower than at other municipalities across Ontario.

18. By February 2012, the City remained unsuccessful in its attempts to recruit for the Residential Mechanical Inspector job class.

19. On February 2, 2012, the City entered into a Letter of Agreement with Local 126 which outlined a protocol for applying market adjustments to salaries of positions when the City was unable to recruit a qualified candidate because of external job market reasons.

20. The Letter of Agreement is set out in Appendix D to the collective agreement. The terms of Appendix D are as follows:

Re: Market Adjustments

The Parties Agree as Follows:

1. Where the City can demonstrate that due to external job market reasons, it is impossible to attract and recruit qualified candidates for a position based on the evaluated job class rate of pay, the Division Head, Human Resources and the affected Department Head(s) may find it necessary to pay more than the rate of pay associated with the evaluated pay band, and may authorize assignment to a higher rate of pay and will advise the Union accordingly.

2. The vacancy shall be reposted internally in accordance with Article 10, indicating that a market adjustment will be applied.

3. All employees (incumbents) assigned to the affected position title will be increased to the higher pay band. However, if the vacancy is not filled or recruitment is cancelled, the market adjustment will not be applied.

4. An employee whose position is reclassified to a higher job class shall receive the new rate of pay in the new job class in accordance with their wage progression level in the old job class.

5. If the market adjusted position is a single incumbent position, and the position becomes vacant, the City may post the vacancy at the evaluated salary level rather than at the adjusted rate.

6. If the market adjusted position is a multi-incumbent position, and one of those positions becomes vacant, it will be posted at the market adjusted rate.

7. A review will be undertaken of any other related position which is affected by the market adjustment.

8. The JJEC shall be advised of all cases where rates other than at the evaluated job classes are in effect.

9. The recruitment process for the Residential Mechanical Inspector spanned nearly two years. At least seventeen applicants were considered but were not qualified.

10. As held by the Review Officer in the Order, the chronology for the recruitment of the Residential Mechanical Inspector is as follows:

Date of job posting

Posting Number

Location of Posting

Salary Range

Number of Candidates

Result

July –

July- August 2011

11-P-25

Ontario Building Officials Association website; City of Peterborough website

$53,330.42 to $56,006.08 (original job rate)

0 internal

5 external

One interviewed but not successful

October 2011

11-P-25 (repost)

Peterborough This Week – classified ad and Municipal World website

$53,330.42 to 56,006.08

(original job rate)

6 applicants

None were interviewed because they were not qualified

May 2012

12-P-17

City of Peterborough website internal posting

$64,052.52 to $67,266.30 (market adjustment applied)

1 internal applicant – competition

Competition placed on hold due to pay equity concerns

February 2013

13-P-13

Peterborough This Week – classified ad; City of Peterborough – internal posting

$53,330.42 to $56,006.08 (original job rate)

4 applicants

None were interviewed because they did not meet qualifications

March 2013

13-P-13 (re-post)

Canada Municipal Jobs – website; Peterborough Examiner - newspaper

$64,052.52 to $67,266.30 (market adjustment applied)

1 internal applicant

Successful candidate hired

Local 126 cannot confirm nor deny this process.

23. It was not until the week of March 8 to 14, 2013 that a successful candidate was hired for the single incumbent job class of Residential Mechanical Inspector. The new hire was hired at a market adjustment rate given the difficulty in recruiting.

24. The market adjustment rate to the salary range for the Residential Mechanical Inspector equated to $10,722 to $11,260.22 (i.e. the original annual salary range of $53,330.42 to $56,006.08 for 2011 was increased to $64,052.52 to $67,266.30 for 2012).

25. Approximately one month later, on or about April 12, 2013, Local 126 filed a grievance alleging that pay equity was not being maintained.

26. The parties attempted to reach an agreement with respect to the issue of the Residential Mechanical Inspector and pay equity maintenance, however, they were unsuccessful. As a result, the City filed an Application for Review Services with the Commission.

27. The Pay Equity Commission (“the Commission”) issued a decision dated January 6, 2014 in which it determined that there was no contravention of the Act. Specifically, the Commission determined that while increases made to the male job class of the Residential Mechanical Inspector did not qualify as a permissible wage difference under section 8(1)(e) of the Act, the City was not required to amend the proportional value line for maintenance purposes. The Commission determined the Residential Mechanical Inspector was not a representative male job class.

28. Since the filing of this Application, the City has encountered the same issue with respect to the following additional three male job classes falling within the Building Services Division, for which a market adjustment has been applied:

(a) Senior Plumbing Inspector

• Vacant as of April 1, 2013 and posted April 12, 2013 at job rate. Four applicants of which 2 were interviewed with no successful candidate.

• Posted with market adjustment December 23, 2013. Seven applicants were interviewed with no successful candidate.

• Posted again with market adjustment May 22, 2014. Internal applicant was promoted as an under fill.

(b) Inspector Residential & Small Buildings

• Vacant as of November 11, 2013. And posted with market adjustment January 9, 2014. Twenty-one applicants of which 2 were interviewed and one candidate was successful.

• The other two incumbents also received the market adjustment as per Appendix D.

• The job was posted at market rate as the qualifications were similar to the other positions that were previously unsuccessful in filling at job rate.

• Second vacancy posted on August 8, 2014 with the market adjustment. Nineteen applicants of which 1 was interviewed and was successful.

(c) Inspector Large and Complex Buildings

• Vacant August 30, 2013 and posted at job rate on May 8, 2013. Ten applicants of which 1 was interviewed and was not successful.

• Posted December 23, 2013 with market adjustment. 11 applicants of which 2 were interviewed

• One successful candidate hired and the other incumbents also received the market adjustment as per Appendix D

• Second vacancy as of July 30, 2014 and posted June 19, 2014 with market adjustment. One internal applicant was successful.

The Positions of the Parties

5. Local 126 submits that it is significant that the Amended 2003 Proportional Value Plan (“the 2003 Plan”) utilized all male job classes within the bargaining unit, including the Residential Mechanical Inspector, for the generation of male wage line. Local 126 contends, therefore, that, in fulfilling its obligation to maintain compensation practices that provide for pay equity, the City is precluded from ignoring the market adjustment rate given to the Residential Mechanical Inspector. It must take that rate into account, and, if necessary, adjust the male wage line accordingly. Local 126 relies upon the decision of the then Chair in Parkwood Hospital (No. 2) (1995), 6 P.E.R. 171 for the proposition that all male jobs must be included in calculating the male pay wage line.

6. Local 126 submits that the City’s refusal to take into account the market adjusted rate for the Residential Mechanical Inspector is, in reality, an ill-conceived attempt to amend the 2003 Plan unilaterally, which, in a unionized environment, an employer cannot do without the agreement of the trade union – see Call-A-Service Inc./Harmony Hall Centre for Seniors (No. 3) 2008 CanLII 88827 (ON PEHT). In Local 126’s submission, the City is endeavouring to re-write the 2003 Plan, and that this is something the Act does not, and the Tribunal cannot, countenance.

7. Local 126 says the situation is no different than, in a job-to-job comparison system, an employer refusing to adjust a female job class in circumstances where its male job class comparator received an increase in wages. The pay equity maintenance requirement obliges an employer to close any gaps between female job classes and their male job class comparators. Local 126 says that that is the situation in this case. The Residential Mechanical Inspector job class (and subsequently three other male job classes), which was included in the establishment of the male wage line pursuant to the 2003 Plan, was assigned a substantial wage increase in May 2012 and March 2013, culminating in the hire in early March 2013 of an internal candidate within the new, higher wage rate. Local 126 submits that, in the absence of an exemption under section 8.1 of the Act (none of which apply in this case) the City is statutorily obligated to amend the male wage line having regard to the market adjustment rate now in existence for the Residential Mechanical Inspector job class, and to make any pay equity adjustments for female job classes that may be required as a result.

8. The City’s position is as follows. There was no obligation upon the City pursuant to the Act, and no agreement between the parties in the 2003 Plan, to negotiate maintenance of pay equity with Local 126. All that the City is required to do in future pursuant to the 2003 Plan is maintain pay equity using the proportional value method.

9. Since the 2003 Plan, the parties have taken the approach that all jobs, regardless of gender dominance, should be paid according to their relative internal value. All jobs within the banding system in the parties’ collective agreement, regardless of their gender dominance, are paid the same rate of pay. This is the compensation system that is now being maintained.

10. Section 21.3 is central to the issues in this case. It describes how pay equity is achieved using the proportional value method of comparison. Maintenance of pay equity is in relation to the achievement of pay equity. The achievement of pay equity under section 21.3 requires comparisons between female job classes and “representative male job classes” (or representative groups thereof); and, if warranted, a proportional adjustment in the job rate of the female job class having regard to the value of its work compared to the value of the representative male job class.

11. The Residential Mechanical Inspector job class was a “representative male job class”, as were all other male job classes, within the meaning of section 21.3 of the Act and under the 2003 Plan. However, following a somewhat prolonged and unsuccessful attempt to hire an individual into the position at the rate of pay dictated by the Residential Mechanical Inspector’s placement in band 10 under the collective agreement, the City and Local 126 devised a market adjustment plan that facilitated the setting of a higher rate of pay under certain circumstances. Thus, in the City’s view, the Residential Mechanical Inspector was no longer a “representative male job class”. Accordingly, in fulfilling its statutory obligation to maintain pay equity, the City was not required by the Act or pursuant to the 2003 Plan, having regard to the market adjusted rate for the Residential Mechanical Inspector job class, to re-draw the male wage line that had been established for the purposes of the 2003 Plan. The achievement of pay equity under section 21.3 (and therefore, concomitantly, the maintenance of pay equity) does not require that female job classes be compared to all male job classes, but only to representative male job classes. The City argues that its interpretation of “representative male job class” is both correct and reasonable.

12. In support of its position, the City referred us to the following decisions: Hamilton Police Association 2010 Can LII 61163 (ON PEHT) and Niagara No. 2 1999 Can LII 14829 (ON PEHT).

Analysis and Conclusions

13. The issues in this matter are whether or not the City is maintaining pay equity and, specifically, whether or not the Act requires the City to amend the proportional value line or ensure its continued correctness taking into account the market adjusted pay rate of the Residential Mechanical Inspector job class. For the reasons that follow, we find that the City in breach of its duty to maintain pay equity.

14. The provisions of the Act relevant to the issues in dispute are:

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

(2) Systemic gender discrimination in compensation shall be identified by undertaking comparisons between each female job class in an establishment and the male job classes in the establishment in terms of compensation and in terms of the value of the work performed.

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

8. (1) 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.

(2) 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.

21.3 (1) Pay equity is achieved for a female job class under the proportional value method of comparison,

(a) when the class is compared with a representative male job class or representative group of male job classes in accordance with this section; and

(b) when the job rate for the class bears the same relationship to the value of the work performed in the class as the job rate for the male job class bears to the value of the work performed in that class or as the job rates for the male job classes bear to the value of the work performed in those classes, as the case may be.

15. The Act is remedial and pro-active in nature. It is designed to redress the harmful effects of gender pay discrimination against females in the workplace. Its aim is to bridge the wage gap between comparable male and female job classes in establishments, and once bridged, to prevent regression. The Act, however, permits some limited exceptions to the rule against differences in compensation between comparable male and female job classes. The Tribunal is a creature of the Act, and as such “has no power to unilaterally create exceptions to the Act.”¹

16. Employers to whom the Act applies are required to establish and maintain compensation practices that provide for pay equity (subsection 7(1)). There is no issue that the City established compensation practices that provide for pay equity, through a negotiated process with Local 126, which ultimately resulted in the 2003 Plan. There is also no dispute between the parties that it is the City, not Local 126, which is statutorily required to maintain those compensation practices. That point is underscored in paragraph 7 of the ASF where it is stated that “[t]he Amended 2003 Proportional Value Plan does not create a joint maintenance process.” Nevertheless, Local 126, as bargaining agent, is statutorily restrained from agreeing to compensation practices that violate the Act. Presumably, that is why it filed a grievance in April 2013 shortly after the City hired the Residential Mechanical Inspector at the market adjustment rate without considering the effect of the higher rate of pay on the male wage line that had been created pursuant to the 2003 Plan.

17. The City’s argument seems to conflate the maintenance of pay equity and the maintenance of the compensation system under the collective agreement. The ASF, however, makes clear that these are two different concepts. Paragraph 7 of the ASF provides that “[t]he Amended 2003 Proportional Value Plan states the proportional value method will be used for the maintenance of pay equity in accordance with Part III of the Act.” This is to be compared with paragraph 14 of the ASF wherein it is stated that the banding and compensation system negotiated between the parties in 2004 and incorporated into their collective agreement “is now maintained between the parties, not the original proportional value line from the Amended 2003 Proportional Value Plan.” The clause “maintained between the parties” must be understood in the context of the collective agreement that contains the banding and compensation system (which, unlike the 2003 Plan, makes no distinction between female and male job classes), and in the context of the applicable statutory regime that governs the parties’ collective bargaining relationship (i.e., the Labour Relations Act, 1995). We do not construe paragraph 14 to mean that the City and Local 126 reached an agreement to conduct a joint pay equity maintenance process going forward, based upon the newly negotiated banding and compensation system, or that the new system itself constituted a pay equity plan or an amended pay equity plan that is subject to maintenance within the meaning of the Act.² The City and Local 126 may well have certain interests, rights and obligations, joint or otherwise, in relation to the banding and compensation system insofar as it constitutes a term or condition of the collective agreement between them. However, the City’s obligation to maintain pay equity under the Act (as opposed to maintenance of the banding and compensation system under the collective agreement) is in respect of the 2003 Plan.

18. Section 8 of the Act sets out a brief list of exemptions to the general rule that there shall not be differences in compensation between comparable male and female job classes.³ The City did not argue that any of the section 8 exemptions apply, including the “skills shortage” exemption in subsection 8(1)(e).⁴ Clearly, the payment of the market adjustment rate to the Residential Mechanical Inspector, a male job class, created a potential wage gap between it and comparable female job classes that previously had been closed through the 2003 Plan. The City says, however, that its pay equity maintenance obligation is not engaged because the Residential Mechanical Inspector is no longer a “representative male job class” within the meaning of subsection 21.3(1) of the Act, although it was such under the 2003 Plan.

19. In support of its argument, the City relies on Hamilton Police Association, supra. In that matter, the employer developed a pay equity plan using the proportional value method. The employer’s establishment contained four female job classes and four male job classes. However, two of the male job classes, Executive Officer and Administrator, both senior executives, were not evaluated and were not taken into account in setting the male wage line. Their salaries were required by By-law to be calculated by reference to the salary of a position external to the employer (i.e. a First Class Constable employed by the Hamilton police force). The complainant, who occupied an accounting or bookkeeping position, challenged the pay equity plan, claiming that her female job class ought to have been compared with the Executive Officer and Administrator positions. The employer took the position that those particular jobs were not representative male job classes under subsection 21.3(1). The Tribunal agreed with the employer. It viewed the two male job classes in question as not representative of the group of employees to which the complainant belonged. In coming to that conclusion, the Tribunal was clearly influenced by the fact that the salaries of the two male job classes were determined solely by reference to the salary level of a position in an entirely different organization. Accordingly, the employer was not required, as part of the achievement of pay equity, to compare the complainant’s job class to that of the disputed male job classes, as they were not representative male job classes.

20. The Hamilton Police Association case is not on all fours with this case. It involved a non-union pay equity plan, and the question before the Tribunal did not concern pay equity maintenance, but rather whether or not the employer had achieved pay equity through the proportional value process. Moreover, the employer in that case, unlike the City in this matter, had no control over the compensation payable to the two male job classes in question. The Tribunal found that pay equity had been achieved notwithstanding the exclusion of the two male job classes from the male wage line, because those job classes were not “representative”. In reaching that finding, the Tribunal was most influenced by the fact that the compensation for the disputed male job classes was determined by a By-law and by reference to the salary of a position in an external organization.

21. The Hamilton Police Association case does not set out, or even anticipate, the circumstances that would justify the emergence of a wage gap between comparable female and male job classes after the achievement of pay equity. It does not stand for the principle that a job class identified in a negotiated pay equity plan as a representative male job class may later be treated as non-representative under certain conditions.

22. One of the problems with the City’s argument that a male job class that was representative for the purposes of achieving pay equity may not be representative for purposes of pay equity maintenance is that there is no express language under the Act to support such a proposition. Subsection 23.1(1) confines itself to the conditions upon which the achievement of pay equity using the proportional value method is determined. On the other hand, the Act, in section 8, expressly sets out the specific circumstances in which discrepancies in compensation between comparable male and female will not be treated as unlawful. In a sense, what the City is proposing in this case is a new set of circumstances that it says ought to exempt it from having to engage in the maintenance process and avoid the consequences that might otherwise follow such a review.

23. A further problem with the position of the City is found in the Letter of Agreement described at paragraph 20 of the ASF. Although the Letter of Agreement confers wide discretion to the City to assign a higher rate of pay than the rate established under the collective agreement to any position, paragraph 7 (“A review will be undertaken of any other related position which is affected by the market adjustment.”) contemplates that market pay adjustments do not necessarily occur in isolation. Paragraph 7 of the Letter of Agreement recognizes that a pay adjustment to one position can affect other related positions. In such circumstances a “review” is required, and presumably such a review is intended to lead to remedial consequences if warranted. This is precisely the kind of process that the maintenance of pay equity envisions. After pay equity has been achieved, circumstances in the workplace may change over time, and may warrant corrective action so that pay equity is maintained. An adjustment in the compensation of a male job comparator is just one such obvious example.

24. In summary: there is no question that, in respect of the 2003 Plan, the Residential Mechanical Inspector was properly included as a representative male job class for purposes of the proportional value exercise that resulted in the creation of the male wage line. The Act does not say expressly that a representative male job class can later be treated as unrepresentative. None of the section 8 exemptions apply in this case. The parties’ 2004 banding and compensation system does not constitute a pay equity plan or an amended pay equity plan that is subject to the maintenance requirement under the Act. The Letter of Agreement between the parties specifically requires a review of related positions where the City assigns a market adjustment to any given position. In light of all these circumstances, we are not persuaded that the Act shields the City from its obligation to maintain the 2003 Plan following the market pay adjustment made in relation to the Mechanical Residential Inspector job class.

25. For these reasons, the application is granted.

26. We declare that the City has failed to maintain pay equity, and is therefore in violation of subsection 7(1) of the Act.

27. We order the City to review the proportional value wage line that was used to establish the 2003 Plan, taking into account the market adjustment rate for the Mechanical Residential Inspector job class, and to pay any pay equity adjustments that may, as a result, be payable to female job classes retroactive to the date of employment of the incumbent in the Mechanical Residential Inspector job class in March 2013.

Dated at Toronto, Ontario this 31st day of August, 2015.

"Patrick Kelly" Patrick Kelly, Vice-Chair

“Irene Harris”

Irene Harris, Member

DECISION OF MEMBER Ann Burke: August 31, 2015

28. I respectfully dissent from the majority decision. For the reasons that follow, I would find that the City was not required to amend the proportional value line or ensure its continued correctness taking into account the market adjusted pay rate of the Residential Mechanical Inspector job class, and is therefore not in breach of its duty to maintain pay equity.

29. The 2003 Plan between the parties does not state that certain male job classes will continue to be used for maintenance purposes, notwithstanding that all male job classes were used to generate a male wage line for comparison purposes. All that the 2003 Plan establishes regarding maintenance, is that the Act’s proportional value method will be used for the maintenance of pay equity.

30. While all of the facts set out in the Agreed Statement of Facts (“the ASF”) are relevant to the determination in this matter, some of the facts are more significant than others, and bear further comment. First of all, I note the parties’ agreement that the compensation practices flowing from the post-2003 Plan banding and compensation system described in paragraphs 11, 12 and 13 of the ASF, and not the proportional value line from the 2003 Plan itself, are what must be maintained by the City for pay equity purposes: see paragraph 14 of the ASF. That compensation system reflects a compensation policy to pay all jobs within a pay band, whether male or female or gender neutral job classes, the same rate of pay. That, in my view, signifies the parties’ acknowledgement that, be it male or female or gender neutral, the value of any particular job, as determined by its placement in a particular band, will determine its level of compensation. Thus, for example, because all the jobs listed in Band 10, including the Residential Mechanical Inspector, perform work of relatively equal value to the City, they are paid within the same pay range. Such a system of compensation, properly constructed within the parameters of the Act, tends to redress any systemic gender wage discrimination that may have previously existed, and thus fulfills the purpose of the Act.

31. The ASF also establishes that, notwithstanding the value to the City of the work performed by the male job class of Residential Mechanical Inspector, the corresponding compensation payable to it (and all other jobs by virtue of their inclusion in Band 10) was insufficient to attract any candidate over a lengthy period of time. Local 126 specifically recognized this dilemma in the Letter of Agreement described at paragraph 20 of the ASF. It acknowledged that, where external job market conditions made it impossible for the City to find a suitable candidate to fill a job at the rate of pay corresponding to its internal value, the City could assign a higher rate of pay to that job. That was the situation with respect to the Residential Mechanical Inspector. Thus pursuant to the Letter of Intent, the City assigned the Residential Mechanical Inspector a market adjustment rate. That effectively put the compensation paid to a Residential Mechanical Inspector even beyond the highest band in the compensation system applicable to the bargaining unit. But its placement there had nothing to do with its internal value to the City.

32. The City argued, and Local 126 did not disagree, that this case turns largely on the statutory interpretation of “representative male job class” within section 21.3(1). That term was the subject of considerable analysis in the Hamilton Police Association decision referred to in the majority decision which, in my view, is useful in the disposition of this proceeding. Beginning at paragraph 51, the Tribunal wrote:

33. The PV methodology provides a means by which the value/compensation ratio of female job classes in an establishment may be compared to the value/compensation ratio of male job classes in an establishment. The Act is clear that the value/compensation ratio of male job classes is to be determined having regard to one or more “representative male job classes”. The term “representative” is not defined in the Act, however its plain English meaning suggests a part standing in for a whole: clearly “representative” implies that it is not necessary to include “every” male job class in the PV analysis:

Representative: serving as portrayal or symbol that presents or can present ideas to the mind; representational; typical of a class or classes, containing typical specimens of all or many classes.

[The Concise Oxford Dictionary (7^th Ed) 1982]

52. A useful starting point for considering what “representative” might mean in this context is to recall the purpose of the Act, and the stage in the pay equity process at which the PV analysis occurs. The Act has its overall purpose the redressing of “gender discrimination” in compensation for work performed by employees in female job classes. The process by which gender discrimination in compensation is identified involves multiple steps. The PV analysis occurs close to the end of the pay equity process – by the time it is over the only thing left to do is to state a protocol for paying out any required requirements that have been identified. It is instructive to consider what steps have already taken place: job classes have been identified; their gender predominance has been determined; an appropriate evaluation tool has been selected; job data has been gathered and the job classes have been evaluated on skill, effort, responsibility and working conditions; the point value or ranking of the jobs has occurred; and any job-to-job comparisons between male and female job classes have been identified. All of the similarities/dissimilarities in the job duties and responsibilities and conditions under which it is performed have already been taken account of in the process. By the time the PV methodology is applied the exercise has become a mathematical calculation of determining the point value/compensation ratio that best reflects the prevailing non-gender-biased (i.e. predominantly male) wage line or formula that applies to the job classes in the establishment. In this context, “representative male job class” cannot mean job classes that are “representative” of the duties performed in the work place or that perform like duties to female job classes. Rather, it must mean male job classes that are “representative” or reflective of how the employer compensates its employees when not influenced by gender-bias about the value of women’s work. We therefore reject Ms. Hudson’s submission that the EO and Administrative job classes are representative because they work in the office along with her, and the Club Manager and Caretaker are not because their duties are dissimilar.

53. The Act has a targeted purpose: the redressing of “gender discrimination” in compensation. There may be a variety of factors that influence how employees are paid: who their employer is and what its sources of revenue are; where they work (the economic conditions of the local market); whether they are unionized; the bargaining strength of their union; whether they possess skills that are in short supply. The Act does not aim to “undo” or redress the effect of any of these factors, but is rather respectful of them, as reflected by the following stipulations applying where pay equity plans must be prepared:

• Each employer must examine its own compensation practices. There is no industry-wide or broader comparison required (section 7(1)).

• The examination of compensation practices for each employer occurs on an establishment by establishment basis (i.e. by geographical location) (sections 7(1) and 13(1)).

• There is a separate examination of compensation practices and a separate pay equity plan required for each “group” of employees in an establishment, that is for each bargaining unit in an establishment and for the unorganized employees in that establishment (section 14(1)).

• Male job class comparators for female job classes are sought in the first instance within the same employee “group”. Representative male job classes for the purposes of PV are also sought in the first instance within the same employee “group” (sections 6(4) and 21.3(2)).

• After pay equity has been achieved, differences in compensation between a female and male job class need not be redressed if they are the result of bargaining strength (section 8(2)).

• Where a male job class of equal value to a female job class is paid an inflated rate because of a skills shortage, that difference is permissible, and no adjustment to the female job class rate is required (section 8(1)(e)).

54. The above observations provide some guidance about what might be considered a representative male job class for the purposes of PV. Representative male job classes are those that will best reflect the value/compensation ratio at which male job classes in the “group” are compensated. They should therefore be job classes within the same employee “group” where that is possible, and should not include a job class that is paid an anomalous rate (like the inflated rate of the male job class with skills that are in short supply). These points are addressed in a publication of the Pay Equity Office that Ms. Hudson relied on in her evidence: Step by Step to Pay Equity: Volume 3 -- Using the Proportional Value Comparison Method. This publication clearly states that jobs that are paid much higher or much lower than their value are not to be included because they will distort the wage line. We agree with this observation.

(emphasis added)

33. The Tribunal went on to find that the Executive Officer and Administrator were not representative male job classes within the meaning of subsection 21.3 of the Act because, among other things, their value/compensation ratios were so dramatically different from the value/compensation ratios of the other two male jobs as to be judged by the Tribunal to be “anomalous”; and secondly, and more significantly, because the salaries of the Executive Director and Administrator were tied to an external referent – the First Class Constable of an external organization. In other words, the wages of the Executive Director and Administrator did not reflect the manner in which the employer paid its male job classes for the value of the work they performed.

34. Local 126 did not offer an alternative interpretation of “representative male job class” or suggest why the Tribunal’s interpretation in Hamilton Police Association was incorrect. In my view, the Tribunal’s analysis of section 21.3 was sound. Furthermore, to the extent that Parkwood Hospital (No. 2), supra, stands for the proposition that all male job classes within an establishment must be used for the purpose of establishing proportional value – and I have considerable doubt that that decision does stand for such a proposition – I would not follow that decision. Clearly, the statute, and in particular subsection 21.3(1), does not go that far. However, the decision of the majority seems to suggest that once a representative male job class, always a representative male job class. I see no reason under the Act why that must be the case.

35. There is no question that, for the purposes of the 2003 Plan, the Residential Mechanical Inspector was properly included for purposes of the proportional value exercise that resulted in the 2003 Plan. The compensation it was paid as a job in Band 10 reflected its value for work performed. It was therefore properly included with all other male job classes to establish the male wage line.

36. The market adjustment rate applied to the Residential Mechanical Inspector in 2012, which effectively took the position beyond the scope of compensation of the highest band of jobs in the bargaining unit, does not reflect the true internal value of the work it performs. Rather, the market adjustment rate was necessitated solely by market conditions which hampered the City’s ability to fill the vacancy when the incumbent left its employ. The market adjustment rate for the Residential Mechanical Inspector does not raise any issue of gender wage discrimination in the sense of over-valuation of the work of a male job class or under-valuation of the work of a female job class. Its current rate of pay, which exceeds that of any other bargaining unit position, makes it one of those “anomalous” male job classes which would tend to distort the male wage line.

37. Another way to think about the issue raised in this application is this. Suppose that the circumstances of this case occurred at the very time the parties were endeavouring to achieve pay equity using the proportional value method. That is, assume that the City had experienced the same difficulties finding a candidate to fill the position of Residential Mechanic Inspector, and that it made the market adjustment rate increase pursuant to the agreement of the parties as set out in the Letter of Intent. Had Local 126 filed an application claiming that the City’s refusal to include the Residential Mechanic Inspector on the male wage line constituted a failure to establish compensation practices that provide for pay equity or a failure to achieve pay equity? It seems to me unlikely that in those circumstances the Tribunal would characterize the Residential Mechanic Inspector as a representative male job class and require its inclusion for purposes of drawing the male wage line and reaching a pay equity plan. Rather, it seems likely, having regard to the analysis in the Hamilton Police Association decision, that the Residential Mechanic Inspector in those circumstances would be viewed as an “anomalous” male job class, and that its exclusion from the male wage line would be justified, and not a violation of the Act’s requirement to establish compensation practices that provide for pay equity. If that is so, why then should Local 126 be placed in a better position pursuant to the pay equity maintenance provisions of the Act as compared to the Act’s imperative to achieve pay equity?

38. The Letter of Intent is a significant consideration in the determination of this matter. It demonstrates that the parties were alert to the distorting effects that market forces might bear on the internal value and associated compensation of bargaining unit jobs, and that in those limited circumstances, the City could depart from the established principles that underscore the compensation policy reflected in the banding system agreed to in 2004. In a sense, this allowed the City to pluck the Residential Mechanic Inspector job class from Band 10 and assign it a rate that exceeded all other bargaining unit job classes as if its value exceeded their value. In such circumstances, the City is not required, as part of its obligation to maintain pay equity, to re-visit the male wage line that was established in respect of the 2003 Plan.

39. The decision of the majority seems to suggest that there is no way that a representative male job class utilized for the achievement of pay equity can ever become “non representative” in the maintenance period following the achievement of pay equity. In my view, there is no reason in principle to construe the Act in that fashion, particularly where, as here, it is clear that the market adjustment rate for the Residential Mechanic Inspector has nothing to do with gender discrimination.

40. Given the unique circumstances of this case, I would have found that the City is not statutorily required to consider drawing a new male wage line as a maintenance measure in response to the market adjustment wage increase for the Residential Mechanical Inspector.

41. For these reasons, I would have dismissed the application.

Dated at Toronto, Ontario this 31st day of August, 2015.

“Ann Burke”

Ann Burke, Member

Footnotes

1. 1Windsor Star v. Communications, Energy and Paperworkers Union, Local 517-G, [2009] O.P.E.D. No. 34
2. 2Indeed, article 23.1 of the collective agreement between the parties appears to recognize a distinction between “the Pay Equity Program” and “the internal pay policy” reflected in the banding and compensation system at Schedule A of the collective agreement. And as the Tribunal noted in Welland County General Hospital (1994), 5 P.E.R. 12, the Act does not incorporate pay equity plans into collective agreements (although pay equity adjustments are incorporated).
3. 3In Ongwanada v. Ontario Public Service Employees' Union, Local 433, [2001] O.P.E.D. No. 9, the Tribunal wrote that, “[s]ection 8 of the Act describes the limited circumstances in which it is acceptable for different job rates to attach to comparably valued male and female job classes.”
4. 4In its response to Local 126’s application, the City said it did not agree with the finding of the Review Officer that subsection 8(1)(e) did not apply, but that it was prepared to accept it for the purposes of this proceeding.