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Ontario’s Pay Equity Act

with Selected Case References, 2022

Disclaimer: This Guide gives an overview of the minimum requirements of the Pay Equity Act as interpreted by the Pay Equity Office. The interpretations are drawn from our own experiences and by applying the key rulings of the Pay Equity Hearings Tribunal and the courts and is current to the date ​of publication.

Exceptions

In this section

(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,

Canadian Union of Public Employees v. Corporation of the City of Peterborough, 2015 CanLII 55324 (ON PEHT) 2015-08-31 — The Tribunal held that the City was in breach of its duty to maintain pay equity. At para. 15, the Tribunal says that maintenance of pay equity is excused only in accordance with the exceptions in s. 8 of the Act. The Tribunal found that the City contravened this section by not maintaining pay equity in accordance with the pay equity plan negotiated by the parties. The Tribunal has no power to unilaterally create exceptions under the Act (at para. 16).

(a) a formal seniority system that does not discriminate on the basis of gender;

Hamilton-Wentworth District School Board v. Ontario Secondary School Teachers’ Federation, 2009 CanLII 60545 (ON PEHT) 2009-10-30 — The Tribunal addressed a dispute about how to calculate the job rate for the male comparator job class. As part of their analysis, at para. 12, the Tribunal found that in order to demonstrate the existence of a formal seniority system which does not discriminate on the grounds of gender, it is necessary to demonstrate that the job rate of the male comparator is equally available to incumbents in the female job class for which it serves as a comparator. Otherwise, discrimination on the basis of gender would exist.

(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;

Law Society of Upper Canada v. Unknown Respondents, 1999 CanLII 14823 (ON PEHT) 1999-02-18 — When considering a merit compensation plan, the Tribunal found that the highest job rate had a bonus merit component such that the exception applied. Thus, the female job class was not required to be compared with actual highest job rate. The Tribunal further directed that an amended plan be drafted where it was required to show that the Employer relied on the exception (at paras. 17-19).

(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

Canadian Union of Public Employees, Local 2974.1 v. Essex (County), 1996 CanLII 8065 (ON PEHT) 1996-11-15 — The Tribunal held that the pay equity plan in place was deficient as it did not include benefits in calculating job rate. At para. 50, the Tribunal outlined what the employer must do in order to establish red- circling as an allowable exclusion under the Act. That is, the employer must be able to show that a red-circling policy and practice was already in effect, that the red-circled positions have been down-graded, and the job rate for the incumbent has been either frozen or curtailed as a result.

CUPE, Local 1623 v. Greater Sudbury Regional Hospital, 2005 CanLII 60099 (ON PEHT) 2005-07-07 — When considering pay equity plans that provided for red-circling, the Tribunal found (at para. 60) that this exception contemplates red- circling of male job classes, not female job classes. Red-circling of female job classes who are paid above the pay equity job rate does not contravene the Act.

Southern Ontario Newspaper Guild v. Canadian Publishing Division of Maclean-Hunter Limited, 1993 CanLII 5414 (ON PEHT) 1993-05-05 — The Tribunal was asked by the employer to find that red-circling during the pay equity process is an acceptable method for determining appropriate job rates for both male and female job classes. At paras. 7 and 8, the Tribunal notes that in order for 8(1)(d) to apply, the Employer must show a difference in compensation between male and female job classes; that a gender neutral re-evaluation process was used; that the value of a position has been down-graded; and that the compensation of an incumbent was frozen or curtailed.

(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.

Stevenson Memorial Hospital v. Ontario Public Service Employees Union, Local 360, 2000 CanLII 22419 (ON PEHT) 2000-02-24 — The Tribunal refused an employer application asking them to revoke a Review Officer’s order that the job rate of a female job class be adjusted to equal its male comparator in the same bargaining unit. The Tribunal found that differences in bargaining strength could only be applied when the male job class and the female job class are in different bargaining units, or when the male job class is in a bargaining unit and the female job class is not. See Regulation 491/93.

Corporation of the City of Windsor v Shirley D. Moor, 2017 CanLII 22919 (ON PEHT) 2017-04-11 — The Applicant complained that the Employer violated section 7 of the Act by reducing her wages for a two-year period below the pay equity job rate that she previously achieved. The Employer argued that the wage reduction is justified pursuant to subsection 8(2) since the reduction occurred as a result of a difference in bargaining strength. The Tribunal held that subsection 8(2) is not concerned with the bargaining imbalance between an employer and the bargaining agent of the female job class in question. Instead, the Tribunal found that it is concerned with the difference in compensation between a female and male job class after pay equity has been achieved but there can be an exception whereby differences between the two job classes can occur as a result of differences in bargaining strength.

BICC Phillips Incorporated v. Group of Employees, 1997 CanLII 12223 (ON PEHT) 1997-10-07 — The Tribunal refused an employer application which asked them for an order that because there has been a change of circumstances in the establishment, the pay equity plan is to be revised. At para. 14, the Tribunal says the onus is on the employer to establish factual circumstances. The Tribunal found that the employer failed to establish it could rely on 8(2) as an exception, nor on changed circumstances to defend against a failure to maintain complaint

York Region Board of Education v. Canadian Union of Public Employees, Local 1734, 1995 CanLII 7202 (ON PEHT) 1995-01-18 — The Tribunal dismissed the employer’s application to revoke an order holding that the employer failed to maintain pay equity with respect to certain female job classes. The employer attempted to rely on section 8(2), but section 8(2) cannot be raised until the employer has achieved pay equity for all employees in its establishment.

Ongwanada v. Ontario Public Service Employees’ Union, Local 433, 2001 CanLII 28100 (ON PEHT) 2001-10-26 — The employer successfully used the bargaining strength defence to object to an order that they had contravened the Act. At para. 21-23, the Tribunal states that there are limited circumstances under which bargaining strength exception may be relied upon and states that the exception is only applicable after pay equity has been achieved.

Corporation of the City of Windsor v. Shirley D. Moor, 2017 CanLII 22919 (ON PEHT) 2017-04-11 — The Tribunal found that the Union and Employer violated the Act when the Union made an agreement that reduced an employee’s wages below the pay equity job rate she had previously achieved. A bargaining imbalance is permitted where the bargaining agent for a male job class is able to achieve gains over the bargaining agent for a female job class as a result of its superior bargaining strength. A bargaining imbalance is concerned with the compensation between a male and female job class, not with the disparity in bargaining strength between the Union and the Employer (at para. 57).

Ottawa Public Library Board v. Ottawa-Carleton Public Employees Union, 2015 CanLII 6950 (ON PEHT) 2015-02-03 — The Tribunal held that the Union and Employer failed to achieve pay equity in the plan they agreed to. At para. 37, the Tribunal states that achieving pay equity is a precondition to satisfying that differences in compensation between female and male job classes is as a result of a difference in bargaining strength. The Tribunal outlines interpretive principles at para. 40 and notes that the party asserting the application of this section bears the burden of demonstrating superior bargaining strength (at para. 41).

Idem

(3) A position that an employer designates as a position that provides employment on a casual basis may be excluded in determining whether a job class is a female job class or a male job class and need not be included in compensation adjustments under a pay equity plan.

Idem

(4) A position shall not be designated under subsection (3) if,

(a) the work is performed for at least one-third of the normal work period that applies to similar full-time work;

(b) the work is performed on a seasonal basis in the same position for the same employer; or

Clow v. Peterborough (City), 1995 CanLII 7217 (ON PEHT) 1995-06-09 — A part-time employee was terminated for pay equity activity, and the Tribunal was asked to determine if she was an employee and thus under the jurisdiction of the Pay Equity Office. The Tribunal determined that part-time seasonal employees are employees for pay equity purposes.

(c) 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. R.S.O. 1990, c. P.7, s. 8.

General Health Services (Circle of Life Health Services) v. Toronto East General Hospital, 2003 CanLII 57507 (ON PEHT) 2003-02-13 — At para. 31, the Tribunal notes the necessity of focusing on the term “work” as opposed to the term “position” or the hours worked by any individual when interpreting section 8(4). Here, the work was performed on a “regular and continuing basis” and thus caught under the Act.

Limitation re maintaining pay equity

(5) The requirement that an employer maintain pay equity for a female job class is subject to such limitations as may be prescribed in the regulations. 1993, c. 4, s. 6.

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