The Act does not provide a specific definition of “employee” except by the two exclusions; however the Tribunal has applied two tests from common law to decide employee status of individuals Wellington (County) v. Butler, 1999 CanLII 14830 (ON PEHT):
- The “total relationship test” examines the nature, structure and actual aspects of the employment relationship.
- The “organizational or integration test” examines whether or not the work is integral to the business.
In the absence of a specific definition, employers should interpret “employee” broadly for the purpose of pay equity.
i. Which employees are covered by the Pay Equity Act?
All employees including management, full-time, part-time, contract and seasonal workers are entitled to pay equity rights under the law. All employees covered under the Act are entitled to receive pay equity adjustments to achieve pay equity, or to make a complaint under the Act that pay equity was not achieved or maintained for their female job class, or to object to a pay equity plan in the case of non-unionized employees of Part II employers.
Part-time employees, who work at least one third of the normal work period, are covered by the Act. Part-time employees, who work on a regular and continuing basis, although for less than a third of the normal work period, are also covered.
Workers who are employed on a seasonal basis, in the same position, for the same employer are also covered Clow v. Peterborough (City), 1995 CanLII 7217 (ON PEHT).
- Are workers in non-standard employment relationships such as consultants, contract, or contingent workers covered by pay equity?
From time to time, employers hire contract, consultants or contingent workers for specific tasks or projects. These individuals may be self-employed for taxation purposes or paid on a contract basis. However, if an individual acts and works like an employee, he/she may well be treated as one under the law. For pay equity purposes, if these individuals fill ongoing positions in the business and their day-to-day work is largely controlled by the organization, they would be considered employees covered under the Act.
ii. Which employees are NOT covered by the Pay Equity Act?
The Act only specifies two groups that are not covered.
- First, [1. (1)] states: “employee” does not include a student employed for his or her vacation period.
- Second, under limited circumstances, it may be possible to exclude casual workers[8. (3) – (4)] from pay equity.
iii. What is the definition of a “casual” position?
A position shall not be considered “casual” if [8. (4)]:
- The work is performed for at least one-third of the normal work period that applies to similar full-time work. “Similar full-time work” does not have to be in the same or similar job class to the casual position. It can be interpreted broadly to mean similar to other job classes in the same job family or category (e.g. clerical work).
- The work is performed on a seasonal basis in the same position for the same employer.
- The work is performed on a regular and continuing basis, although for less than one-third of the normal work period that applies to similar full-time work. “Regular” implies that the work will be performed according to a pattern, for example every other Friday or three hours per week, with a shared expectation between the employer and employees as to that pattern. “Continuing” suggests the existence of the work over a reasonable period of time.
The exclusion of casual positions applies only when the work performed is casual work. The definition of a position as casual does not depend on whether the individual employee(s) hired to do the work is/are employed on a casual basis. This means that regardless of the number of hours or sporadic schedule of any individual worker, if the job meets any one of criteria listed in (a), (b) or (c) above, the designation of casual would not be appropriate and the position would not be exempt from the Act General Health Services (Circle of Life Health Services) v. Toronto East General Hospital, 2003 CanLII 57507 (ON PEHT).
Examples of Casual Workers:
- A general clerk is hired for a few days to complete a one-time project or an interviewer is hired for two months to conduct a one-time customer survey. These individuals would be considered in casual positions and exempt from pay equity.
- An employee is scheduled to work every Monday throughout the year. This work is “regular and continuous”. Therefore, the job is not casual and the position is not exempt under the Act.
- An employer runs a ski resort and hires ski instructors for four months every winter. The employer hires both new and returning employees as instructors. These employees are not considered casual and thus the position is not exempt under the Act because the work performed is seasonal and for the same employer.