SUPREME COURT OF CANADA

Citation: Canada (Human Rights Commission) v. Canadian Airlines International Ltd., [2006] 1 S.C.R. 3, 2006 SCC 1

Date: 20060126

Docket: 30323

Between:

Air Canada

Appellant

v.

Canadian Human Rights Commission and Canadian Union

of Public Employees (Airline Division)

Respondents

‑ and ‑

Attorney General of Canada, Canada Post Corporation, Communications

Energy and Paperworkers Union of Canada, Public Service Alliance of

Canada and Federally Regulated Employers — Transportation and

Communication

Interveners

Coram: McLachlin C.J. and Bastarache, Binnie, LeBel, Fish, Abella and Charron JJ.

Reasons for Judgment:

(paras. 1 to 45)

LeBel and Abella JJ. (McLachlin C.J. and Bastarache, Binnie, Fish and Charron JJ. concurring)

Canada (Human Rights Commission) v. Canadian Airlines International Ltd., [2006] 1 S.C.R. 3, 2006 SCC 1

Air Canada Appellant

v.

Canadian Human Rights Commission and Canadian Union

of Public Employees (Airline Division) Respondents

and

Attorney General of Canada, Canada Post Corporation, Communications,

Energy and Paperworkers Union of Canada, Public Service Alliance of

Canada and Federally Regulated Employers — Transportation and

Communication Interveners

Indexed as: Canada (Human Rights Commission) v. Canadian Airlines International Ltd.

Neutral citation: 2006 SCC 1.

File No.: 30323.

2005: October 19; 2006: January 26.

Present: McLachlin C.J. and Bastarache, Binnie, LeBel, Fish, Abella and Charron JJ.

on appeal from the federal court of appeal

Human rights — Discriminatory practices — Equal wages — Definition of “establishment” — Federal human rights legislation making it discriminatory for employer to pay different wages for men and women performing work of equal value in same “establishment” — Whether flight attendants, pilots and mechanics of airline company in same establishment for purposes of wage comparisons — Whether employees subject to common personnel and wage policy — Canadian Human Rights Act, R.S.C. 1985, c. H‑6, s. 11 — Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.

Statutes — Interpretation — Guidelines — Guidelines adopted to clarify interpretation of statute — Nature of relationship between guidelines and statute — Canadian Human Rights Act, R.S.C. 1985, c. H‑6, s. 11 — Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.

The flight attendants’ union launched a complaint against the employer airline under s. 11 of the Canadian Human Rights Act, claiming that the employer discriminated against flight attendants, a predominantly female group, by paying them differently than mechanics and pilots, who were predominantly male. Under s. 11, it is a discriminatory practice for an employer to establish differences in wages between male and female employees employed in the same “establishment” who are performing work of equal value. According to s. 10 of the Equal Wages Guidelines, 1986 adopted under the Act, employees of an establishment include all employees subject to a “common personnel and wage policy”. Addressing a preliminary question, the Canadian Human Rights Tribunal found that the wages of the flight attendants could not be compared to the wages of the other two groups since they were not in the same “establishment”. It emphasized that the vast majority of the employer’s wage and personnel policies applicable to the employees in the three groups were found in separate collective agreements and in branch‑specific manuals that applied only to a particular bargaining unit. Given the differences between the policies as reflected in those agreements and manuals, the Tribunal concluded that the flight attendants had failed to prove a common personnel and wage policy, and dismissed the complaint. On judicial review, the Federal Court—Trial Division upheld the dismissal, but the Federal Court of Appeal allowed the union’s appeal.

Held: The appeal should be dismissed. The matter should be remitted to the Canadian Human Rights Commission to continue its investigation into whether there is wage discrimination.

Under s. 10 of the Guidelines, which supplements s. 11 of the Act, employees subject to a common personnel and wage policy will be in the same establishment, regardless of whether they are subject to different collective agreements or are in the same geographic location. The search for a “common personnel and wage policy” is a factual inquiry into whether the employer applies a common set of principles or takes a general approach to its employment relationships, including collective bargaining. Factors may vary from one employer to another, and a policy may be common even if working conditions vary. At the end of the inquiry, if a common wage and personnel policy is established, a notional establishment consisting of various functions or occupational groups comes into existence, and it is then used to identify the proper comparators for pay equity purposes. [27‑36] [43]

The search for a “common personnel and wage policy” is not an inquiry into every term of every collective agreement or employment contract in search of a preponderance of common or disparate terms. While the terms of collective agreements are not irrelevant, their relevance is limited. By their very nature, these terms will vary with the imperatives of the particular employee or bargaining unit. To use those differences as barriers to wage comparisons would thwart the very purpose of s. 11. Furthermore, if the inquiry were to focus on these differences, “establishment” would be equated with “bargaining unit”, thereby undermining the purpose of the Canadian Human Rights Act. [36] [39‑40]

In this case, the flight attendants, mechanics and pilots belong to the same “establishment”. The employer has put in place a common policy reflected in its common approach to collective bargaining, the administration of labour contracts, its methods of communication with unions and employees, and its common negotiating strategies and concerns. Although the collective agreements of the groups differed and the common policies may have been implemented in different ways, common policies remained in place. [43‑44]

Cases Cited

Referred to: Bell Canada v. Canadian Telephone Employees Association, [2003] 1 S.C.R. 884, 2003 SCC 36; Canadian National Railway Co. v. Canada (Canadian Human Rights Commission), [1987] 1 S.C.R. 1114; Canada (Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146; Bristol‑Myers Squibb Co. v. Canada (Attorney General), [2005] 1 S.C.R. 533, 2005 SCC 26; New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993] 1 S.C.R. 319; British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42.

Statutes and Regulations Cited

Act to amend the Canada Labour (Standards) Code, S.C. 1970‑71‑72, c. 50.

Canada Labour Code, R.S.C. 1970, c. L‑1, s. 38.1 [rep. 1976‑77, c. 33, s. 66].

Canada Labour (Standards) Code, S.C. 1964‑65, c. 38, s. 14a(1) [ad. 1970‑71‑72, c. 50, s. 8].

Canadian Charter of Rights and Freedoms, s. 2(d).

Canadian Human Rights Act, R.S.C. 1985, c. H‑6, ss. 11, 27(2).

Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.

Female Employees Equal Pay Act, S.C. 1956, c. 38, s. 4(1).

Authors Cited

Canada. Canadian Human Rights Commission. Background notes on proposed guidelines — equal pay for work of equal value. Ottawa: The Commission, 1985.

Canada. Canadian Human Rights Commission. Equal Pay for Male and Female Employees Who Are Performing Work of Equal Value — Interpretation Guide for Section 11 of the Canadian Human Rights Act. Ottawa: The Commission, reprinted May 1981.

Canada. House of Commons. Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs, Issue No. 11, May 17, 1977, 2nd Sess., 30th Parl., 1976‑1977, p. 11:46.

Canada. House of Commons. Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs, Issue No. 12, May 18, 1977, 2nd Sess., 30th Parl., 1976‑1977, pp. 12:19‑12:20.

Lavoie, Linda, et Myriam Trudel. Loi sur l’équité salariale annotée. Cowansville, Qué.: Yvon Blais, 2001.

Morin, Fernand, et Jean‑Yves Brière. Le droit de l’emploi au Québec, 2^e éd. Montréal: Wilson & Lafleur, 2003.

APPEAL from a judgment of the Federal Court of Appeal (Rothstein, Nadon and Evans JJ.A.), 2004 FCA 113, [2004] 3 F.C.R. 663, 238 D.L.R. (4th) 255, 318 N.R. 201, [2004] CLLC ¶ 230‑022, [2004] F.C.J. No. 483 (QL), 2004 FCA 113, setting aside a decision of Hansen J., 2001 FCT 840, [2002] 1 F.C. 158, 209 F.T.R. 111, 202 D.L.R. (4th) 737, [2002] CLLC ¶ 230‑003, 41 C.H.R.R. D/207, [2001] F.C.J. No. 1258 (QL), 2001 FCT 840, dismissing an application for judicial review of a Canadian Human Rights Tribunal’s decision (1998), 34 C.H.R.R. D/442, [1998] C.H.R.D. No. 8 (QL). Appeal dismissed.

Roy L. Heenan, Q.C., and Rob Grant, for the appellant.

Andrew Raven, David Yazbeck and Karen E. Ceilidh Snider, for the respondent the Canadian Human Rights Commission.

Douglas J. Wray, for the respondent the Canadian Union of Public Employees (Airline Division).

Anne M. Turley, for the intervener the Attorney General of Canada.

Written submissions only by Brian A. Crane, Q.C., and David P. Olsen, for the intervener the Canada Post Corporation.

Written submissions only by Peter Engelmann, for the intervener the Communications, Energy and Paperworkers Union of Canada.

Mary Cornish, for the intervener the Public Service Alliance of Canada.

Sheila R. Block and Kathleen E. L. Riggs, for the intervener the Federally Regulated Employers — Transportation and Communication.

The judgment of the Court was delivered by

LeBel and Abella JJ. —

I. Overview

1 This pay equity case began almost 15 years ago. Yet our Court must now dispose of a preliminary but important question. To determine whether an employer is discriminating in remunerating male and female employees, comparisons must inevitably be made among groups of employees. These comparisons — assessing the relative skill, effort, responsibility and working conditions involved in the occupational groups — may or may not result in the conclusion that discrimination has taken place. But before they can be made, it is necessary first to determine which group or groups of employees can be compared under the relevant legislation. That preliminary question is now before us.

2 The Canadian Human Rights Act, R.S.C. 1985, c. H-6 (the “Act”), administered by the Canadian Human Rights Commission, makes it discriminatory for employers to pay different wages for men and women performing work of equal value in the same establishment. According to one of the Commission’s binding guidelines, employees are deemed to be employed in the same establishment if they are subject to a common personnel and wage policy. This appeal centres on what constitutes an “establishment” for purposes of the Act and what it means to have a common personnel and wage policy. The issue is whether flight attendants, mechanics and pilots belong to the same establishment. If so, the female-dominated jobs of flight attendants can be compared with the male-dominated occupations of mechanics and pilots in order to determine whether women are being unlawfully underpaid, contrary to the pay equity principles in the Act. For the reasons that follow, we conclude that the Federal Court of Appeal correctly held that the “establishment” includes all three groups. Accordingly, we would dismiss the appeal and remit the matter to the Canadian Human Rights Commission for the continuation of its investigation into whether there is wage discrimination.

II. Background

3 In November 1991, the Canadian Union of Public Employees (“CUPE”) launched a complaint against Air Canada. It claimed that Air Canada discriminated against flight attendants, a female-dominated group, by paying them differently for what it argued was equally valuable work performed by mechanical personnel and pilots, who were predominantly male. CUPE and the Commission both submitted that personnel and wage policies are not found in individual or collective contracts of employment, but in the general approach taken by an employer to those contracts, regardless of differences in their terms. If there is a common general approach, all employees subject to it form part of the same establishment.

4 Air Canada, in response, argued that flight attendants could not be compared to pilots and mechanics because the three groups of employees belonged to three distinct bargaining units set up 60 years ago and were covered by three separate collective agreements whose differences demonstrated that the three groups were not subject to a “common personnel and wage policy”. The three groups of employees were not in the same “establishment”, it argued, since each of the three separate bargaining units constituted a separate establishment. The essence of Air Canada’s submission was that collective agreements are the defining sources of personnel and wage policies, and that the common elements in them are what determine the extent to which different groups of employees can be said to be subject to a common personnel and wage policy.

5 Because of its position that the pilots and mechanics worked in different “establishments” for purposes of the Act, Air Canada sought an order from the Federal Court prohibiting the Commission from proceeding with its investigation. Some time before the matter was to be heard, the parties agreed to permit the Commission to investigate, as a preliminary question, whether the flight attendants and the comparator groups were within the same establishment. In its investigation, the Commission noted that the two comparator groups identified — pilots and mechanics — were predominantly male, and that the flight attendants who sought to compare themselves were predominantly female. The Commission also confirmed that wages for flight attendants were lower than for the two groups to which they compared themselves. The Commission recommended that the “establishment issue” be referred to a Canadian Human Rights Tribunal.

6 A Tribunal was appointed on August 15, 1996. The only issue before that Tribunal was the preliminary question of whether flight attendants, pilots, and mechanics are in the same establishment for purposes of wage comparisons. Other aspects of CUPE’s complaint, including notably the actual comparison of the value of flight attendants’ work compared to that of pilots and mechanics, were not addressed.

7 The Tribunal agreed with Air Canada that the wages of the flight attendants could not be properly compared to those of the two other groups since they were not in the same “establishment”. It emphasized that the vast majority of Air Canada’s wage and personnel policies applicable to the employees in the three groups were found in separate collective agreements and in branch-specific manuals that applied only to a particular bargaining unit. Given the differences between the policies as reflected in those agreements and manuals, the Tribunal concluded that the flight attendants had failed to prove a common personnel and wage policy and, accordingly, dismissed the complaint ((1998), 34 C.H.R.R. D/442).

8 On judicial review, the Federal Court — Trial Division upheld the dismissal ([2002] 1 F.C. 158, 2001 FCT 840).

9 The Federal Court of Appeal (Rothstein, Nadon and Evans JJ.A.) allowed the appeal ([2004] 3 F.C.R. 663, 2004 FCA 113). Rothstein J.A. held that the focus of the “establishment” inquiry should be on what was within the power or control of the employer. Finding that Air Canada treated all of its employees as part of a single, integrated business under a common personnel and wage policy, he concluded that the flight attendants, pilots and mechanics at Air Canada were in the same establishment for the purpose of comparing their wages. He held that the matter should be remitted to the Tribunal on the basis that the groups of employees sought to be compared worked within the same establishment.

10 In concurring reasons, Evans J.A. elaborated on the purpose of human rights legislation and the background to the promulgation of the Equal Wages Guidelines, 1986, SOR/86-1082, as compelling the conclusion reached by Rothstein J.A. Evans J.A. relied on the facts that flight attendants, mechanics and pilots all work in the core business of Air Canada, that personnel and compensation issues are under the direction of the central human resources division of Air Canada, that general corporate human resources policies apply to all three groups, and that a single committee within Air Canada is responsible for coordinating the process of negotiating collective agreements with all three bargaining units.

III. Analysis

(1) The Legal Framework and the Issues

11 The Act establishes the legal framework for the application of pay equity principles to employment relationships governed by federal law. Some provincial legislatures have chosen to enact distinct laws and have set up separate administrative and adjudicative processes to implement pay equity, outside general human rights statutes, to address the particular form of discrimination against women which denies them equal pay for work of equal value (see, for example, L. Lavoie and M. Trudel, Loi sur l’équité salariale annotée (2001)).

12 The Parliament of Canada took a different path. It incorporated the principle of pay equity in the Canadian Human Rights Act itself. The Act provides that maintaining wage differentials between male and female employees doing work of equal value is a discriminatory practice. Section 11(1) states:

11. (1) It is a discriminatory practice for an employer to establish or maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value.

13 Section 27(2) authorizes the Commission to adopt guidelines in order to bring more certainty and clarity to the interpretation of the Act. It may

on application or on its own initiative, by order, issue a guideline setting out the extent to which and the manner in which, in the opinion of the Commission, any provision of this Act applies in a particular case or in a class of cases described in the guideline.

Our Court has held that such guidelines are regulations which complement the provisions of the Act and should be read together with them (Bell Canada v. Canadian Telephone Employees Association, [2003] 1 S.C.R. 884, 2003 SCC 36, at para. 48). Acting under this authority, the Commission adopted s. 10 of the Guidelines, which was intended to complement s. 11 of the Act. Section 10 provides that employees subject to the same wage and labour policies are deemed to be within the same establishment, for the purpose of the implementation of s. 11 of the Act:

10. For the purpose of section 11 of the Act, employees of an establishment include, notwithstanding any collective agreement applicable to any employees of the establishment, all employees of the employer subject to a common personnel and wage policy, whether or not such policy is administered centrally.

14 In this Court, there was no challenge to the validity of s. 10 of the Guidelines. The issue then becomes a question of statutory interpretation in the context of human rights legislation. More particularly, the issue is the interpretation of the word “establishment” found in both s. 11 of the Act and s. 10 of the Guidelines. The correct interpretation of “establishment” will allow the identification of appropriate comparators. Given the nature of its principles and objectives, pay equity cannot be achieved without proper comparators. The notion of establishment is central to the analysis because the Act requires that the proper comparators be found within an “establishment”. We must then determine the meaning or scope of this word when s. 11 of the Act is read in conjunction with s. 10 of the Guidelines, using the relevant rules of statutory interpretation.

(2) The Interpretation of Human Rights Laws

15 Narrow interpretations may sterilize human rights laws and defeat their very purpose. Our Court cautioned against this risk in Bell Canada in the course of reviewing aspects of the function of a Human Rights Tribunal, per McLachlin C.J. and Bastarache J.:

In answering this question, we must attend not only to the adjudicative function of the Tribunal, but also to the larger context within which the Tribunal operates. The Tribunal is part of a legislative scheme for identifying and remedying discrimination. As such, the larger purpose behind its adjudication is to ensure that governmental policy on discrimination is implemented. It is crucial, for this larger purpose, that any ambiguities in the Act be interpreted by the Tribunal in a manner that furthers, rather than frustrates, the Act’s objectives. [para. 26]

16 In Canadian National Railway Co. v. Canada (Canadian Human Rights Commission), [1987] 1 S.C.R. 1114, at p. 1134, Dickson C.J., acknowledging the unique purpose of human rights legislation, held that “the words of the Act must be given their plain meaning, but [that] it is equally important that the rights enunciated be given their full recognition and effect” and held that remedial statutes like the Act are to be given “such fair, large and liberal interpretation as will best ensure that their objects are attained”.

17 The object of s. 11 of the Act is to identify and ameliorate wage discrimination. This purpose guides its interpretation. As Evans J. stated in Canada (Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146 (T.D.), at para. 199:

[N]o interpretation of section 11 can ignore the fact that the mischief at which it is principally aimed is the existence of a wage gap that disadvantages women, as a result of gendered segregation in employment and the systemic undervaluation of the work typically performed by women.

(3) A Short History of Federal Pay Equity Legislation

18 Equal pay legislation was first passed by Parliament in 1956 (Female Employees Equal Pay Act, S.C. 1956, c. 38), mandating that an employer not pay men and women differently for substantially identical work. Section 4(1) of that Act stated:

4. (1) No employer shall employ a female employee for any work at a rate of pay that is less than the rate of pay at which a male employee is employed by that employer for identical or substantially identical work.

19 The original legislation guaranteed only equal pay for equal work. All of an employer’s employees were covered. This limited principle was superseded in the current Act, passed in 1977 (S.C. 1976-77, c. 33), which moved to a new paradigm of obliging employers to maintain equal pay for work of equal value. The gap between those two iterations of Canada’s equal pay legislation was bridged, to some extent, by amendments in the early 1970s to the Canada Labour Code.

20 In 1971, in the Act to amend the Canada Labour (Standards) Code, S.C. 1970-71-72, c. 50, the 1956 legislation was repealed and replaced by equal pay provisions in the Canada Labour (Standards) Code, S.C. 1964-65, c. 38, introducing for the first time the concept of the same establishment, rather than the same employer. The new s. 14a(1) of the Code provided:

14a. (1) No employer shall establish or maintain differences in wages between male and female employees, employed in the same industrial establishment, who are performing, under the same or similar working conditions, the same or similar work on jobs requiring the same or similar skill, effort and responsibility.

Comparisons could only be made within “the same industrial establishment”.

21 In 1977, as part of the package of legislative amendments introducing the Canadian Human Rights Act, s. 14a (then s. 38.1) was removed from the Canada Labour Code, R.S.C. 1970, c. L-1. The “industrial establishment” limitation was carried forward into the “establishment” limitation in s. 11 of the Act. This amendment meant that pay equity comparators had to be found within each employer and within those sets of functions or activities which were distinct enough to be acknowledged as a separate establishment. As the Minister of Justice, the Honourable S. R. Basford, said at the time:

We used “establishment” because it has been used in the Labour Code, and there is a body of case law, both of the Labour Relations Act and of the Courts, relating to the use of those words. It was a word that caused some concern among some presenting briefs, in that employers could divide their establishments in order to set up different wage scales in those establishments. Therefore, it was urged that we use the words “same employer” but that creates real difficulties in terms of regional wage scales and regional and geographic factors.

(House of Commons, Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs, Issue No. 12, May 18, 1977, at pp. 12:19-12:20)

22 Shortly after, the Commission issued a non-binding interpretation guide limiting “establishment” by geographic boundaries:

“Establishment” refers to all buildings, works or other installations of an employer’s business that are located within the limits of a municipality, a municipal district, a metropolitan area, a county or the national capital region, which ever is the largest, or such larger geographic limits that may be established by the employer or jointly by the employer and the union.

(Equal Pay for Male and Female Employees Who Are Performing Work of Equal Value — Interpretation Guide for Section 11 of the Canadian Human Rights Act (1981), at p. 4)

23 Under this interpretation guide, until the enactment of the Equal Wages Guidelines, 1986, “establishment” in s. 11 of the Act was understood to mean an integrated, geographically coherent business belonging to a specific employer, making the starting point of the establishment analysis under the Act an essentially corporate definition, limited only by geography. That meant that only where an employer’s business represented multiple and distinct undertakings, or became geographically diverse, could multiple establishments exist within an employer’s business.

(4) The Impact of Section 10 of the [Equal Wages Guidelines, 1986](https://www.canlii.org/en/ca/laws/regu/sor-86-1082/latest/sor-86-1082.html)

24 In introducing the guideline power and the Act itself (Bill C-25) in 1977, the Hon. S. R. Basford acknowledged that, in the arena of equal pay for work of equal value, some provinces had been deterred by the complexity of going beyond the old standard of equal pay for equal work, and explained the resulting federal approach found in the new 1977 Act and guideline-making power as follows:

The federal government has adopted a different approach: that we should legislate the principle [of equal pay for work of equal value] and, through the Commission and through its efforts at setting out guidelines, solve those problems.

(House of Commons, Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs, Issue No. 11, May 17, 1977, at p. 11:46; see also Canada (Attorney General) v. Public Service Alliance of Canada, at paras. 77‑78.)

25 As a result of these changes, equal pay issues are now determined in accordance with s. 10 of the Guidelines passed by the Commission in 1986 pursuant to s. 27(2) of the Act. Section 10 is repeated here for ease of reference:

10. For the purpose of section 11 of the Act, employees of an establishment include, notwithstanding any collective agreement applicable to any employees of the establishment, all employees of the employer subject to a common personnel and wage policy, whether or not such policy is administered centrally.

This new and binding guideline no longer referred to geographic limitations.

26 A question now arises as to the nature of the relationship between the Guidelines and the Act. Before this Court, Air Canada argued that the Guidelines’ definition of “establishment” supplants the definition of establishment found in s. 11 of the Act and that it is therefore unnecessary to examine s. 11 of the Act or the history of its application. The Commission, on the other hand, submits that s. 10 of the Guidelines is not exhaustive of the meaning of “establishment” for purposes of the Act.

27 The interpretation advanced by Air Canada does not accurately describe the legal relationship between the Guidelines and the Act. The Guidelines complement the Act but do not abrogate it. As this Court concluded in Bell Canada, such Guidelines are binding and intended to “ad[d] precision to the Act, without in any way trumping or overriding the Act itself” (para. 48). The Guidelines were enacted to enable the Commission to add clarifying supplements, where necessary, to the leanly articulated principles in the Act. The purpose of s. 10 of the Guidelines is, accordingly, to supplement, not supplant, the provisions of the Act. It goes without saying, therefore, that the Guidelines should be interpreted in a way which remains consistent with the text and objectives of the Act (Bristol-Myers Squibb Co. v. Canada (Attorney General), [2005] 1 S.C.R. 533, 2005 SCC 26, at para. 38).

28 The wording itself of s. 10 makes it clear that it does not purport to define “establishment”. Instead, it states that, for purposes of s. 11 of the Act, “employees of an establishment include” all of an employer’s employees who are subject to a common personnel and wage policy, regardless of any collective agreement and regardless of whether the common policy is centrally administrated. Section 10 operates as a guide or complementary provision which provides additional content and context for the application of the notion of “establishment”. The fact that “establishment” in s. 10 of the Guidelines is said to “include” employees who are subject to common personnel and wage policies indicates that this particular guideline should not be viewed and applied as if it were an exhaustive definition: see New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993] 1 S.C.R. 319, at p. 376-77. This conclusion was reached by the Tribunal and it is a conclusion with which we agree.

29 Having concluded that s. 10 of the Guidelines does not provide the only cartography for discovering the meaning of “establishment”, we turn to its intended impact. When the Act was passed in 1977, “establishment” in s. 11 was, as previously discussed, understood to have a particular meaning, namely an integrated geographically coherent business, as confirmed by the non-binding guide of 1978. Since the 1986 Guidelines cannot be interpreted as overriding any provision of the Act, the issue is the extent to which s. 10 of the Guidelines refined the meaning of “establishment” in s. 11 of the Act.

30 The background to s. 10's implementation is illuminating. First, despite some proposals to that effect, the notion of “establishment” was not removed from the Act. Establishments still had to be identified and comparators found within them. Then, in March 1985, the Commission issued background notes which indicated that the proposed guideline was intended to represent a new approach to the meaning of establishment. The new guideline looked beyond bricks and mortar, formal organizational units or geography. It adopted a fall-back position, which focussed on the common character of compensation and personnel policies. The Commission stated:

Establishment will be determined by reference to the personnel and compensation policies and practices of the employer rather than a geographic location or unit of organization.

Employees of an employer shall be considered to be in the same establishment when they are subject to a common set of personnel and compensation policies, regulations and procedures; and when these policies, regulations and procedures are developed and controlled centrally even though their administration may be delegated to smaller units of organization. [Emphasis added.]

(Background notes on proposed guidelines — equal pay for work of equal value (March 1985), at p. 22)

31 The rationale advanced by the Commission for this change was:

This approach addresses for example, the situation where employees in different physical locations or regions are subject to the same collective agreement. With a geographical definition of establishment it might be possible to limit the scope of a remedy to the geographic or organizational unit where the complainant is located, even when there are others subject to the same conditions in other locations. [p. 11]

32 Following invitations to interested parties to respond to its proposed change in the interpretation of “establishment” in s. 11 of the Act, the Commission received a number of submissions from both employer and union representatives. As a result of these submissions, the Commission reformulated its proposed directive on the notion of establishment as follows in September 1985, clarifying that even employees in different geographic locations could be deemed to be in the same establishment and that the scope of collective bargaining units and the contents of agreements would not be the determinative factor:

Employees of an employer shall be considered to be in the same establishment when they are subject to a common corporate policy which is controlled centrally even though their administration may be delegated to smaller units of organization. For greater certainty, a collective agreement between an employer and a bargaining agent is not considered to be a corporate personnel and compensation policy. [Emphasis added.]

33 In an accompanying memorandum sent to members of the Commission, the head of its Equal Pay Section, T. N. Ulch, confirmed that the intention was to rebut the suggestion that each collective agreement represented a separate establishment:

[T]he language of the guideline on establishment will be changed to ensure that it reflects the intent of the Commission to define establishment as broadly as possible. There was concern expressed that the present wording could be interpreted in a sense that would limit an establishment to a single collective bargaining unit; [Emphasis added.]

34 While the final language of s. 10 of the Guidelines is somewhat different from the September 1985 proposal, the two earlier proposed drafts, when read with the language ultimately found in s. 10, reflect a consistent intention: all employees subject to the same “common set of personnel and compensation policies, regulations and procedures”, “common corporate policy”, or “common personnel and wage policy”, will be in the same establishment, regardless of whether those employees are subject to different collective agreements and regardless of whether they are in the same geographic location. No longer were geographically diverse businesses immunized from the definitional reach of “establishment” in s. 11 of the Act, if and when a common policy applied to them.

35 This, therefore, is the key refinement polished by s. 10 of the Guidelines: regardless of regional or geographical differences, or of differences in collective agreements, employees may nonetheless be found to be in the same establishment pursuant to s. 11 of the Act if they are subject to a common wage and personnel policy.

(5) Common Wage and Personnel Policy

36 Given this interpretation of “establishment”, the issue is whether an employer has actually put in place a common policy. The search for the “common personnel and wage policy” is a factual inquiry as to whether there is a common set of principles or a general approach taken by an employer to its employee/employer relationships, including collective bargaining. It is not, with respect, an inquiry into every term of every collective agreement or employment contract in search of a preponderance of either common or disparate terms. Moreover, given the nature of the collective bargaining process and the give and take inherent in it, the contents of the agreement may not entirely reflect the policies of the employer. The investigation, we repeat, is not so much into the collective agreements, as into those policies, methods and objectives of the employer itself, which could be considered a “common policy”. A policy may be common, even if working conditions vary. If the common character of the policies, methods and objectives is established, a notional establishment consisting of various functions or occupational groups comes into existence, which is then used to identify the proper comparators for pay equity purposes.

37 The phrase “common personnel and wage policy” in s. 10 of the Guidelines is neither as complicated as Air Canada suggests, nor as restrictive. We would not adopt a pure test of control, which might become formalistic. Nor would we sanction the use, without more, of a notion of a “guiding mind”, which could lead to the application of a pure corporate control test and, in effect, abrogate the legal requirement that there be an establishment. Nevertheless, the object of the inquiry remains the employer and the employment objectives it seeks to implement. The expression “a common personnel and wage policy” connotes the existence of core objectives which are achieved by establishing the working conditions of employees, including those governed by collective agreements. This is how the Commission has always interpreted “establishment”, an approach common sense and legislative purpose combine to endorse. It is regrettable that Air Canada has resisted this pragmatic definition of “common personnel and wage policy” for almost 15 years, creating enormous expense for itself and the public, and intolerable delay in wage equity, should the flight attendants ultimately succeed.

38 The purpose of s. 10 of the Guidelines is to attach a pay equity obligation in relation to those employees comprised within a “policy unit”. Where a group of employees is subject to such a common policy, the employer’s responsibility under the Act is to ensure that equal pay for work of equal value is maintained, as between those employees, even if the work in different sectors is governed by separate collective agreements. On the other hand, where an employer has a business in which wage and personnel matters are dictated by different policies in different sectors, it is difficult to see how that employer would be required to ensure equal pay between those sectors.

39 This is not to say that the terms of collective agreements are irrelevant, but only that their relevance is limited. The question is the existence of common policies and objectives governing the bargaining process on behalf of the employer. The nature of the underlying bargaining policy and of its impact and constraint on the bargaining process is of more salience than the actual terms ultimately negotiated. This is so particularly since, by their very nature, the terms of employment contracts and collective agreements will vary with the imperatives of the particular employee or bargaining unit. To use those differences as barriers to wage comparisons would thwart the very purpose of s. 11 of the Act, namely to determine whether differences in wages between male- and female-dominated bargaining units or job classifications are discriminatory.

40 If the inquiry were to focus on differences in the terms of collective agreements, as suggested by Air Canada, workplaces would be exempt from the very comparisons the Act contemplated. “Establishment” would be equated with “bargaining unit”, thereby undermining the purpose of the Act, namely to determine whether wages paid to women reflect an underevaluation based on systemic discrimination resulting not only in occupational segregation, but also in diminished bargaining strength, and, likely, diminished wages and benefits. As this Court said in British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3, at para. 42, in the human rights context, an interpretation by which “the edifice of systemic discrimination receives the law’s approval . . . cannot be right”.

41 In the end, the interpretive approach advanced by Air Canada would turn collective bargaining into a tool to consolidate discriminatory practices. Freedom of association is a basic constitutional right protected by s. 2(d) of the Canadian Charter of Rights and Freedoms. The present methods of union certification and collective bargaining have been long and well established. Labour codes seek to give a large scope to the freedom of collective bargaining, in order to attain a degree of balance as well as of stability and peace in labour relations. Nevertheless, collective bargaining does not operate in a vacuum and labour agreements are not interpreted and applied in a void. They are constrained by a legal environment which, among other things, prohibits discriminatory practices (F. Morin and J.-Y. Brière, Le droit de l’emploi au Québec (2nd ed. 2003), at pp. 973-77). Pay equity may well impact on the conduct or outcome of negotiations as part of a legal environment which parties must factor into the collective bargaining process. Human rights principles often become part of collective agreements, explicitly or implicitly (Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42).

42 Moreover, because “establishment” is merely a threshold issue, it cannot have been intended to be the subject of protracted investigation into the terms of the myriad agreements, manuals, policies and guidelines by which employees are governed. It is by no means clear what the harvest of the comparison will eventually be. The details of collective agreements and other specific features of the employment relationship are more relevant when the actual comparisons are made, rather than being used to thwart the possibility of those comparisons. Finding and evaluating the proper comparators belongs to the core functions of the Commission and of the Tribunal.

43 Based on the common wage and personnel policies applicable to the employees in the three groups, we are of the view that they work in the same establishment, as the Federal Court of Appeal held. Sufficient indicia demonstrate the existence of a common wage and personnel policy, which applies to the three bargaining units. Factors may vary from one employer to another. In the case of Air Canada, despite the structure and history of its labour relations, the three units make up an establishment within the meaning of s. 11 of the Act.

44 The Federal Court of Appeal found that the policy statements of Air Canada established a common set of general policies in respect of the management of its labour relations, informing the particular relations with each group of employees. These statements reflected a common approach to collective bargaining, the administration of labour contracts and methods of communication with unions and employees. Air Canada also took care to safeguard common negotiation strategies and concerns, as appears from the document “Air Canada’s Labour Relations Policy and Principles”, of May 22, 1991. Agreements differed. Common policies may have been implemented in different ways, but common policies remained in place and, as a result, there is an establishment made up of, among others, pilots, mechanics and flight attendants. The relevant comparators may properly be sought in this establishment.

IV. Disposition

45 Accordingly, the appeal is dismissed with costs throughout. Because this disposes of the preliminary question assigned by the Commission to the Tribunal, the matter is remitted to the Commission for the continuation of its pay equity investigation.

Appeal dismissed with costs.

Solicitors for the appellant: Heenan Blaikie, Montréal.

Solicitors for the respondent the Canadian Human Rights Commission: Raven, Cameron, Ballantyne & Yazbeck, Ottawa.

Solicitors for the respondent the Canadian Union of Public Employees (Airline Division): Caley & Wray, Toronto.

Solicitor for the intervener the Attorney General of Canada: Deputy Attorney General of Canada, Ottawa.

Solicitors for the intervener the Canada Post Corporation: Gowling Lafleur Henderson, Ottawa.

Solicitors for the intervener the Communications, Energy and Paperworkers Union of Canada: Sack Goldblatt Mitchell, Ottawa.

Solicitors for the intervener the Public Service Alliance of Canada: Cavalluzzo Hayes Shilton McIntyre & Cornish, Toronto.

Solicitors for the intervener the Federally Regulated Employers — Transportation and Communication: Torys, Toronto.