Bluewater Health v Service Employees International Union, Local 1 Canada
PEHT Case No: 0311-22-PE
Bluewater Health, Applicant v Service Employees International Union, Local 1 Canada, Respondent
BEFORE: M. David Ross, Chair, Carol Phillips and Lori Bolton, Members
APPEARANCES: Danielle Leon Foun Lin and Andrea Sobko appearing on behalf of the applicant; Carolyn Kay appearing on behalf of the respondent
DECISION OF THE TRIBUNAL: June 6, 2023
This is an application under the Pay Equity Act, R.S.O. 1990, c.P.7, as amended (“the Act”).
At the heart of this dispute is whether the applicant, Bluewater Health, was permitted to unilaterally complete an amended pay equity plan notwithstanding its agreement with the respondent to negotiate the pay equity plan in accordance with the requirements set out in the Act. The applicant submitted that once the parties reached impasse in their negotiations it was entitled to complete the plan to comply with its statutory obligation to ensure pay equity is achieved and maintained. The respondent submitted that the applicant was not entitled to complete and implement a pay equity plan unilaterally.
The parties agreed in their pre-hearing conference memorandum that the first question that the Tribunal should consider is:
whether the Hospital is required to negotiate a pay equity plan due to the sale of business provisions under section 13(1) of the Act and/or due to the Terms of Reference (“TOR”) signed by the parties in 2006? If so, whether the Hospital’s actions met those requirements.
- The parties filed a “partial agreed statement of facts” and books of documents. The applicant called Christine Mathers and Colleen Cook to testify to the history of the negotiations and the applicant’s decision to complete the plan unilaterally. The respondent called Alexandra Murphy to respond to the applicant’s evidence.
The Evidence
On June 30, 2006, the parties signed Terms of Reference (“TOR”) to negotiate a new pay equity plan and maintenance procedure for the SEIU clerical and service bargaining units at Bluewater Health. The TOR established that the effective and retroactivity date of the new pay equity plan would be December 16, 2003. This date references when Bluewater Health was formed when a group of hospitals were amalgamated. The Public Sector Labour Relations Transition Act, 1997 applied to this amalgamation.
In the TOR, the parties agreed that they “shall negotiate in good faith to develop a pay equity plan and maintenance procedure as required by the Pay Equity Act. All negotiations will by governed by the Pay Equity Act and in accordance with this agreement”.
The TOR established the Joint Rating Committee (“JRC”) and Joint Steering Committee (“JSC”) and their respective mandates. Importantly for this dispute, the TOR does not specify a dispute resolution procedure if the parties are unable to conclude the pay equity plan, it does not contain a termination provision, and it does not contain any term which incorporates the TOR into the collective agreement.
On November 3, 2006, the parties agreed to develop the gender-neutral comparison system (“GNCS”) and other job evaluation documents with three other hospitals that also had bargaining relationships with the respondent, the Service Employees International Union, Local 1.
A job evaluation manual was finalized dated May 9, 2008.
In or around June 2010, the respondent raised issues about the GNCS being gender biased. This dispute proceeded to the Pay Equity Commission in February 2011 when the hospitals filed an Application for Review Services. The Review Officer’s decision was appealed to the Tribunal. The parties resolved their disputes in a Memorandum of Settlement dated September 11, 2013. The parties to that settlement agreed to use the established GNCS and to “meet as soon as possible to revisit the subfactor ratings and to complete the job evaluation process”.
In 2014, another dispute proceeded to the Tribunal with respect to proposed “Implementation Guidelines” regarding the Impact on Others subfactor. This dispute was also resolved between the parties following a pre-hearing conference that was held on July 28, 2014.
The parties continued with the pay equity process throughout the period of 2015 to 2018. In 2018, the applicant raised to the respondent that it believed that several job classes were missed and needed to be evaluated. The respondent did not agree that this happened.
Also in 2018, the applicant raised with the union that since such a long period of time had passed, they should make the plan current to 2018. The respondent refused to consider evaluating the plan to bring it up to date and preferred to keep the timeline only from 2003 to 2008. Ms. Murphy relied on the TOR for this proposition, and while the parties both acknowledged that they acted as if the TOR limited the period to 2008, there is absolutely nothing contained in the TOR that limits the process to that period.
At this point in 2018, there was “significant disparity” regarding their evaluations on the Education and Experience subfactors, and their differing opinions about whether job classes, specifically male job classes, had been missed and needed to be evaluated. The applicant believed the parties were at an impasse. The respondent disagreed that they were at impasse and believed that there were only nine subfactor disputes between the parties. The evidence demonstrated that there must have been considerably more than nine disputes given that the parties were not ad idem about whether positions had been missed and needed to be evaluated.
When asked why the applicant did not file an Application for Review Services in 2018 once the applicant determined that it had reached an impasse with the bargaining agent, Ms. Mathers testified that she believed that proceeding to the Commission and the Tribunal would be a “waste of time”.
The Tribunal heard ample evidence from the parties’ witnesses as to who is to blame for the breakdown of negotiations. Ms. Mathers claimed that the union was unreasonable in their positions and refused to budge on any dispute (which is not negotiation), while Ms. Murphy claimed that the hospital was unreasonable, avoided meeting with the union, and attempted to undo the progress that they had made. All this evidence demonstrated to the Tribunal was that the relationship between the parties was dysfunctional and both lead negotiators, Ms. Mathers and Ms. Murphy, demonstrated inflexibility when considering the other parties’ positions. For the purposes of this decision, it does not matter to the Tribunal which party was more to blame for this dysfunction, but in our opinion neither Ms. Mathers nor Ms. Murphy can claim the “moral high ground” over why these negotiations broke down.
In 2018, a group of retired employees filed an Application for Review Services complaining that pay equity had not been maintained for the RPN classification. By decision dated March 15, 2019, the Review Officer found that the individual employees did not have standing to bring an application under the Act because they were represented by a bargaining agent. The Review Officer also found that since the bargaining agent was still in the process of negotiating a pay equity plan, the application was premature.
In that March 15, 2019 Notice of Decision, the Review Officer also found that the TOR was binding on the employer and the union, and “if the Employer and Union reach an impasse while trying to implement the agreement, either party is able to file an Application for Review Services with the Pay Equity Office”. The Tribunal understands that neither party sought review of this March 15, 2019 decision.
On March 19, 2019, the respondent filed an Application for Review Services.
After the application was filed, the applicant advised the respondent that they would no longer engage in a joint process and completed the pay equity plan unilaterally. The applicant posted its plan and made the pay equity adjustment payments. The applicant provided the plan to the respondent for their input prior to the implementation of the plan, but it does not appear to the Tribunal that there was sufficient time for the respondent to have engaged in that process between when the plan was provided and implemented. However, it is also clear to the Tribunal that the respondent has never actually reviewed the plan to see where it disagrees with the plan as of the last date of the hearing in this matter.
Summary of the Parties’ Submissions
The applicant submitted that it had an obligation to comply with its obligations under the Act and once pay equity negotiations broke down completely it was entitled to terminate the TOR that was signed in 2006 to ensure that pay equity was achieved and maintained. The applicant submitted that the Act only dictates that the parties must enter into negotiations “with a view” to concluding a plan but does not mandate the process that must be used. The applicant submitted that while the Act requires the negotiations to be done in good faith, it is silent as to what must happen when those negotiations break down.
The applicant submitted that the Act did not require them to file an Application for Review Services if there was an impasse. The applicant submitted that the respondent was fixated on the 2008 date and refused to consider any other process that would allow the parties ensure pay equity is achieved and/or maintained.
The applicant submitted that its 2019 plan was in effect the maintenance of the predecessor pay equity plans and there was no evidence that the predecessor plans were “inappropriate” and required a new or amended plan.
The applicant submitted that it would be pointless for a review officer or the Tribunal to direct the parties to return to negotiations as it is obvious that these parties are never going to agree to any plan. It submitted that its partnership with the bargaining agent was no longer viable on this endeavour. It has been 20 years since the amalgamation, and all such a direction would do is ensure that the parties are back to the Tribunal in another few years, with a pay equity plan still not being resolved. The applicant submitted that its unilateral action to complete a plan up to date was necessary to ensure that it complied with its statutory obligations under the Act.
The applicant relied on the following cases in support of its position that it was entitled to terminate its agreement to negotiate the pay equity plan with its bargaining agent: Shaw Cablesytems (Manitoba) Ltd., 1997 CarswellMan 56; Nordic Gaming Corporation (Fort Erie Race Track), 2010 ONCA 101; Nippissing Ouest (Municipalite), 2021 ONCA 544; and Re: Phoenix Homes Limited, 2023 CarswellBC 319.
The respondent submitted that the Act and the TOR clearly obligated the applicant to negotiate the plan with it, and nothing permitted the applicant to repudiate the TOR and unilaterally complete the plan. It submitted that the TOR explicitly incorporated all of the terms of the Act, especially when viewed in the context where the parties had negotiated the plan and proceeded to Review Services and the Tribunal on a couple of occasions when disputes arose.
The respondent sought several declarations from the Tribunal, including to confirm the Review Officer’s order, to set aside the unilaterally created plan, and to order any other remedy that the Tribunal deems just and reasonable to further the objectives of the Act.
The respondent relied on the following authorities in support of its position: Eurocan Pulp & Paper Co., (1998 1998 CanLII 30121 (BC LA), 72 L.A.C. (4th) 153; Alberta Wheat Pool, (1994) 1994 CanLII 18642 (CA LA), 44 L.A.C. (4th) 382; Family and Children’s Services of Lanarak, Leeds and Grenville, (2016) C.L.A.S. 118; Quaker Oats Co. of Canada Ltd., (1999) 2000 CanLII 50238 (ON LA), 91 L.A.C. (4th) 1; Bhasin v Hynew, 2014 SCC 71; Simcoe Muskoka Catholic School Board, 2018 CanLII 123879 (ON PEHT); Ottawa Public Library Board, 2015 CanLII 6950 (ON PEHT); TRW Canada Limited, 1995 CanLII 7216 (ON PEHT); Riverdale Hospital, 2 P.E.R. 1, 1990 CarswellOnt 3681.
Relevant Applicable Statutory Provisions
- The purpose of the Act is set out in section 4(1):
The purpose of this Act is to redress systemic gender discrimination in compensation for work performed by employees in female job classes.
- In this case, there is no dispute between the parties that that section 13.1 of the Act applies because of the application of the Public Sector Labour Relations Transition Act, 1997. Section 13.1 of the Act states:
Sale of a business
13.1 (1) If an employer who is bound by a pay equity plan sells a business, the purchaser shall make any compensation adjustments that were to be made under the plan in respect of those positions in the business that are maintained by the purchaser and shall do so on the date on which the adjustments were to be made under the plan.
Plan no longer appropriate
(2) If, because of the sale, the seller’s plan or the purchaser’s plan is no longer appropriate, the seller or the purchaser, as the case may be, shall,
(a) in the case of employees represented by a bargaining agent, enter into negotiations with a view to agreeing on a new plan; and
(b) in the case of employees not represented by a bargaining agent, prepare a new plan. 1993, c. 4, s. 8.
Same
(3) Clause 14 (2) (a), subsections 14.1 (1) to (6) and 14.2 (1) and (2) apply, with necessary modifications, to the negotiation or preparation of a new plan. 1997, c. 21, s. 4 (1).
(4) Repealed: 1997, c. 21, s. 4 (1).
Application to certain events
(4.1) This section applies with respect to an occurrence described in sections 3 to 10 of the Public Sector Labour Relations Transition Act, 1997. For the purposes of this section, the occurrence shall be deemed to be the sale of a business, each of the predecessor employers shall be deemed to be a seller and the successor employer shall be deemed to be the purchaser. 1997, c. 21, s. 4 (2).
Definitions
(5) In this section,
“business” includes a part or parts thereof; (“entreprise”)
“sells” includes leases, transfers and any other manner of disposition. (“vend”) 1993, c. 4, s. 8.
- As set out in section 13.1(3), subsections 14(2) and 14.1 (1 to 6) of the Act are incorporated with the necessary modifications. Section 14(2) of the Act states:
(2) The employer and the bargaining agent for a bargaining unit shall negotiate in good faith and endeavour to agree, before the mandatory posting date, on,
(a) the gender-neutral comparison system used for the purposes of section 12; and
(b) a pay equity plan for the bargaining unit.
- Subsections 14.1(1 to 6) state:
14.1 (1) If, in an establishment in which any of the employees are represented by a bargaining agent, the employer or the bargaining agent is of the view that because of changed circumstances in the establishment the pay equity plan for the bargaining unit is no longer appropriate, the employer or the bargaining agent, as the case may be, may by giving written notice require the other to enter into negotiations concerning the amendment of the plan.
Application of s. 14
(2) Clause 14 (2) (b) and subsections 14 (3), (4) and (5) apply, with necessary modifications, to the negotiations and to any amendment of the plan that is agreed upon.
Failure to agree
(3) If the employer and the bargaining agent do not agree on an amendment before the expiry of 120 days from the date on which notice to enter into negotiations is given, the employer shall give notice of the failure to the Commission.
Same
(4) Subsection (3) does not prevent the bargaining agent from notifying the Commission of a failure to agree on an amendment by the date referred to in that subsection.
Non-bargaining unit plan
(5) If the employer is of the view that, because of changed circumstances in the establishment, the pay equity plan for that part of the establishment that is outside any bargaining unit is no longer appropriate, the employer may amend the plan and post in the workplace a copy of the amended plan with the amendments clearly indicated.
Same
(6) Subsection 15 (2) and subsections 15 (4) to (8) apply, with necessary modifications, in respect of an amended plan described in subsection (5).
Decision and Analysis
The first part of the question the Tribunal was asked to decide in this case is whether the Hospital is required to negotiate a pay equity plan due to the sale of business provisions under section 13(1) of the Act and/or due to the TOR signed by the parties in 2006?
The answer to that question is an obvious yes. In this case, the parties agreed to negotiate a new pay equity plan for Bluewater Health pursuant to the TOR signed in 2006. There is no dispute that section 13.1 of the Act applies in this case. It is immaterial to this decision of whether this is technically referred to as a new pay equity plan (section 13.1) or an amendment to a pay equity plan (section 14.1) since the obligation to negotiate in good faith applies to all negotiations, and they explicitly agreed as such in the TOR.
Section 13.1(2) requires an employer to enter into negotiations with its bargaining agent with a view to agreeing on a new plan.
Furthermore, subsection 14(2)(b) also requires employers to negotiate pay equity plans that apply to unionized employees with their bargaining agents. This applies where there is a sale of business because subsection 13.1 (3) of the Act cross references subsection 14(2)(a), and subsections 14.1(1 to 6). Subsection 14.1(2) cross references that 14(2)(b) of the Act, which obligates the employer to negotiate in good faith with its bargaining agent to endeavor to agree to a pay equity plan for the bargaining unit.
Accordingly, the Tribunal confirms that the applicant was required to negotiate the pay equity plan with the respondent.
The second question the Tribunal was asked to determine was if so, whether the Hospital’s actions met those requirements?
The Tribunal finds that the Hospital did not negotiate in good faith when it repudiated the TOR and unilaterally completed the pay equity process. While the Tribunal entirely appreciates the need to finalize the plan without further delay and make any pay equity payments that may be owing, the requirement to negotiate said plan is statutorily mandated.
There is no ambiguity about the meaning of the term “negotiate”. The Tribunal also does not agree that the inclusion of the words “enter into negotiations with a view to agreeing” or “shall negotiate in good faith and endeavour to agree” create an ambiguity to where it opens the possibility for an employer to disregard the obligation to negotiate with its bargaining agent if the parties reach an impasse.
On March 15, 2019, Review Services explicitly set out for the parties that if they reach an impasse, they should file an Application for Review Services with the Pay Equity Office. Less than one week later, the respondent did just that. It was incumbent on the applicant to participate in that process and repudiating the TOR and proceeding unilaterally in the face of an ongoing application at Review Services is inconsistent the requirement to negotiate in good faith.
Furthermore, subsections 14.1(3) and 14.1(4) of the Act contain the provisions about what happens if the parties are unable to agree to the plan or amendments to the plan. These provisions are mandatory by the use of the word “shall”. As such, when parties reach an impasse when trying to create a new plan or amend a plan under section 13 of the Act, they must provide notice of their failure to complete the plan with the Pay Equity Commission. The Tribunal notes that the time limit is set at 120 days and recognizes that this timeline is rarely achieved in practice as these plans take a considerable amount of time and effort. This is not to say that a delay of 15 to 20 years is acceptable at all to the Tribunal, but there were multiple applications filed with Review Services at various points of this process, so some delay is to be tolerated. However, a purposive interpretation of the Act and this language is clear that if the parties are unable conclude the plan, then the next step is to seek assistance from Review Services to assist the parties in resolving the disputes and have a Review Officer issue orders/decision if those efforts are unsuccessful. Given that the respondent did file an application less than one week after the March 15, 2019 decision, the respondent afforded itself of this statutory avenue to resolve the parties’ impasse.
If at any point, the applicant felt that the respondent was not bargaining in good faith as required by the TOR and the Act, it could have filed its Application for Review Services on that narrow issue as well.
The Tribunal does not agree with the applicant that section 14.1(3) of the Act because a formal “notice to bargain” was not provided. The Tribunal has no qualms in finding that when the parties agreed to the TOR, that agreement recognized, implicitly or explicitly, that notice to negotiate the new plan was given. That is exactly what the document purports to do. It is an agreement to negotiate a new plan and established a process for doing so. Furthermore, the TOR explicitly states that the negotiations were to be conducted pursuant to the Pay Equity Act, which includes recognizing that the parties agreed to negotiate a new plan in good faith pursuant to the terms of the Act. Any interpretation to the contrary would ignore the purpose of the Act, the parties’ conduct, and would undermine the exclusive bargaining rights that the Act explicitly confers to bargaining agents (which it does not confer to employees if they are not represented by a bargaining agent).
With respect to Ms. Mathers’ opinion that proceeding to the Commission and Tribunal would be a “waste of time”, to be blunt, her opinion does not give the applicant the authority to change the definition of “negotiate”. It does not give the applicant the authority to ignore the dispute resolution process required by the Act, nor to ignore the fact that an Application for Review Services had been filed prior to the decision to complete the plan unilaterally. Furthermore, the Tribunal does not accept her statement when considering the evidence in this case, as the evidence demonstrates that whenever the parties did utilize these processes, settlements were reached between the parties.
The Tribunal also does not agree that there is an inherent right to terminate the TOR as submitted by the applicant. The applicant relied on contract law cases that stand for the proposition that there is an implied term to terminate a contract where there is no defined term set out in the contract. The applicant acknowledged that the law was clear that there was no presumption that a contract was terminable on notice, but each case must be reviewed on facts. It is noteworthy that none of the cases relied upon by the applicant involved an agreement between an employer and its bargaining agent. These agreements are not the kinds of commercial contracts that are considered in the cases relied upon. A bargaining relationship is long recognized as a different kind of relationship. There are both statutory and constitutional rights that guide these relationships. It is common in labour-management negotiations for the parties to have different priorities and resist demands of the others where the parties must work through those disputes. It is also common for these disputes to become adversarial that require the parties to utilize the applicable dispute resolution processes for the dispute. That may include utilizing the Hospital Labour Disputes Arbitration Act where collective bargaining reaches an impasse in the hospital sector; the grievance and arbitration procedure set out in a collective agreement if a dispute arising out of the collective agreement cannot be resolved; and proceeding to Review Services and possibly the Tribunal if there are unresolvable pay equity disputes.
In any event, even if the Tribunal did find that the TOR was terminable with notice, that still did not give the applicant the right to then finalize and implement the pay equity plan unilaterally given the statutory requirement to negotiate it with the respondent. While the Act does not dictate the form that the negotiations take, it must be negotiated, and if there is an impasse, the parties proceed to Review Services for assistance. If the parties cannot resolve their dispute(s) with the assistance of the Review Officer, the Review Officer issues a decision. Both parties have the statutory right to proceed to this Tribunal to adjudicate the dispute if they are not satisfied with the Review Officer’s Order or Notice of Decision.
Nor does the Tribunal agree with the respondent that the TOR in this case could form part of the collective agreement. There is no reference to it being incorporated into the collective agreement and the Tribunal heard no evidence to suggest that it was.
Now, the respondent should not be celebrating the Tribunal’s conclusion that it was correct in its position that the applicant should not have finalized the plan unilaterally. To the contrary, the respondent should be embarrassed that it has reached this stage, and embarrassed that the applicant felt it necessary to unilaterally complete a plan and make pay equity payments to the union’s members because it had taken a decade and a half to get to this point.
The fact that Ms. Murphy admitted that the union was unwilling to consider amending the process to bring it more current than 2008 is disappointing, as it supports the applicant’s submission that the parties are at an impasse and the proposition that directing the parties back to negotiations would be fruitless and only serve to delay the matter. There is nothing in the TOR that precluded the parties from amending the process which had become stale to comply with the spirit and intent of the Act.
The fact that, as of the date the parties made their oral submissions, the union had not even reviewed the employer’s plan to see where any discrepancies lie between them is not only disappointing but perplexing if the union is genuinely interested in having its members receive any potential pay equity adjustments, and not their estates. This last comment is not hyperbole, as in 2018, it was a group of retired members who were trying to ensure pay equity was achieved or maintained, so they could benefit from any adjustments that they earned during their employment with Bluewater, represented by the SEIU, Local 1 prior to retiring.
On this point, the Tribunal is sympathetic to Ms. Cook’s evidence that the applicant wanted to pay out what it understood its pay equity obligations were, to date. However, the Tribunal does not agree with the applicant that the process that they used was permitted by the Act or the TOR.
Lastly, this is not a pay equity maintenance case. The parties agreed to negotiate a pay equity plan retroactive to December 16, 2003. The new pay equity plan must be implemented before pay equity maintenance happens. Trying to do maintenance before the new pay equity plan is completed is “putting the cart before the horse”. As such, in this case, the applicant cannot rely on its obligation to maintain pay equity to justify repudiating the TOR and unilaterally creating and implementing a pay equity plan.
Remedy
The applicant asserted that sending the parties back to negotiate a pay equity plan would be fruitless as the parties have demonstrated that they are unable to reach agreement, and all that would result in is further delay. The Tribunal agrees with this assessment. After hearing from the lead negotiators from both parties, the Tribunal has no confidence that directing the parties back to negotiations will not just delay this dispute indefinitely, and only serve to further delay the resolution of these matters that go back to 2003.
During argument, the respondent requested the Tribunal to make any order it deems just and reasonable in the circumstances that will advance the purposes of the Act. In the Tribunal’s view, there is a clear statutory pathway that provides a more efficient way to resolve the pay equity plan between the parties, with the understanding that the parties are unlikely to reach agreement without further assistance from Review Services and/or a decision from the Tribunal.
This pathway is found in section 25(2)(a) of the Act, which states:
where it finds that an employer or a bargaining agent has failed to comply with Part II or III.1, may order that a review officer prepare a pay equity plan for the employer’s establishment and that the employer and the bargaining agent, if any, or either of them, pay all of the costs of preparing the plan.
The Tribunal finds that it is appropriate on the facts of this case, to further the principles of the Act, to order that a Review Officer prepare the pay equity plan. The Pay Equity Office and the review officer shall be afforded deference about the process it uses to complete the plan, including whether an expert is retained pursuant to section 25(3) of the Act.
The Tribunal considered providing a short period in which the parties could attempt to finalize the plan, failing which a Review Officer shall complete the plan as it ordered in Simcoe Catholic District School Board, 2018 CanLII 123879. However, given the evidence in this case, the Tribunal is not satisfied that this will be productive and only result in further delay.
To be clear, the Tribunal has made no findings about whether the applicant’s plan that it completed is reasonable and otherwise complies with the Act. Likewise, it has made no findings about whether the respondent’s positions on the subfactor disputes are correct. Nor does the Tribunal make any comments about the merits on any other substantive dispute between the parties about the process or the plan itself. Those issues are left for the review officer to decide and resolve as part of preparing the new plan.
The plan that is prepared by the review officer shall be effective from the date it is completed and posted to December 16, 2003, as contemplated by the parties in the TOR.
Any pay equity payments that have been made by the applicant after it unilaterally completed the plan may be offset against any pay equity adjustments required by the plan that is to be completed by a Review Officer.
The parties retain their rights pursuant to section 25(4)(d) of the Act. The parties are advised that if they challenge the plan prepared by the review officer, that the Tribunal with review the plan on the same reasonableness standard which the Tribunal reviews challenges to deemed approved pay equity plans.
“M. David Ross” .
M. David Ross, Chair
“I agree”
Carol Phillips, Member
“I agree”
Lori Bolton, Member

