What is pay equity maintenance?
Under s. 7 of Ontario’s Pay Equity Act (the “Act”), employers are required to achieve and maintain pay equity. Once an employer has achieved pay equity, there is a requirement that the employer periodically revisit their compensation practices to ensure that male jobs are not paid more than similarly valued female jobs, and that no new wage gaps have emerged over time.
The Act does not outline what maintenance practices and procedures should be followed, however the Pay Equity Hearings Tribunal (the “Tribunal”) in Call-A-Service Inc v An Anonymous Employee defined maintenance as follows:
Maintenance is the means by which an employer ensures that compensation practices are kept up-to-date and remain consistent with pay equity principles. Subsection 7(1) of the Act imposes an obligation on an employer to establish and “maintain” compensation practices that provide for pay equity. Maintenance is an ongoing responsibility. It includes reviewing job classes regularly to capture any changes to job duties and responsibilities, which may require pay equity adjustments. Some examples of changes resulting from ongoing maintenance are: changes to job titles; changes to the duties and responsibilities of a job that may place it in a different job class and salary scale; the creation or elimination of a job class, in particular, a male comparator job class; and changes in the gender dominance.
The Act does not prescribe a fixed cycle for review. However, most experts agree that pay equity maintenance should be conducted on a regular cycle (e.g. every one to three years). There are no prescribed procedures in the Act for maintaining pay equity but, generally, the method of comparison used to achieve pay equity (i.e. job-to-job, proportional value, proxy comparison) should be used for maintenance.
What are a union’s maintenance obligations under the Pay Equity Act?
While a bargaining agent does not have a prescribed statutory role in the maintenance process, section 7(2) of the Act prohibits a bargaining agent from bargaining for or agreeing to compensation practices that, if adopted, would cause a violation of the employer’s obligation to achieve or maintain pay equity as required by the Act. Bargaining agents have a duty to take steps to ensure an employer has maintained pay equity. The Pay Equity Hearings Tribunal has confirmed that the bargaining agent has a right to all information that is reasonably required to assess whether the employer has maintained pay equity.
Can employers and unions negotiate a pay equity maintenance agreement?
Section 7(1) of the Act places the obligation to maintain pay equity solely on the employer. However, nothing precludes the employer and the bargaining agent from agreeing to a joint process for pay equity maintenance, including by means of a joint Memorandum of Agreement or Terms of Reference regarding pay equity maintenance.
If a joint process has not been negotiated between the parties for pay equity maintenance, the employer can proceed unilaterally to conduct its own maintenance exercise. However, if the bargaining agent reviews the employer’s maintenance exercise and believes that pay equity has not been properly maintained, a complaint can be filed with the Pay Equity Commission or a grievance may be filed under the collective agreement.
Under what circumstances might a union be involved in negotiating amendments to a pay equity plan?
There are certain conditions under which a pay equity plan may no longer be appropriate. This is the case if there are “changed circumstances” that render the existing pay equity plan inappropriate. Section 14.1(1) of the Act provides that if either party is of the view that there are changed circumstances rendering the plan no longer appropriate, written notice can be given requiring the other party to enter into negotiations. Both sides are then required to negotiate amendments to the plan in good faith.
The Act does not define what constitutes “changed circumstances” so this is determined on a case by case basis, either by agreement between the parties or a decision from the Pay Equity Commission (with the option to appeal to the Tribunal). Some examples of changed circumstances may include:
- the restructuring of an establishment
- the certification of a union in a non-union establishment
- the amalgamation or merger of two or more businesses
It is also important to note that if there has been a “sale of business” pursuant to section 13.1 of the Act, pay equity plans that are in effect may no longer be appropriate.
What options do unions have for dealing with pay equity maintenance issues?
There are different avenues of recourse for unions and bargaining agents to address an employer’s failure to maintain pay equity. Contact us to discuss these different options and strategic considerations.