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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.

Pay equity plans required

13. (1) Documents, to be known as pay equity plans, shall be prepared in accordance with this Part to provide for pay equity for the female job classes in each establishment of every employer to whom this Part applies and, without restricting the generality of the foregoing,

Whitby (Town) v. Whitby Professional Firefighters’ Association, 2000 CanLII 22423 (ON PEHT) 2000-11-23 — An employer objected a Review Officer’s Order to negotiate a pay equity plan on the basis that at the effective date of the Act, all of the job classes within the bargaining unit were male-dominated. At para. 50, 51, & 53, Tribunal clarified that Part II employers have an obligation to prepare and post a pay equity plan even where no comparisons are required because all of the job classes in a bargaining unit are male-dominated,

(a) shall identify the establishment to which the plan applies; and

(b) shall identify all job classes which formed the basis of the comparisons under section 12.

Idem

(2) If both female job classes and male job classes exist in an establishment, every pay equity plan for the establishment,

(a) shall describe the gender-neutral comparison system used for the purposes of section 12;

(b) shall set out the results of the comparisons carried out under section 12;

(c) shall identify all positions and job classes in which differences in compensation are permitted by subsection 8 (1) or (3) and give the reasons for relying on such subsection;

(d) shall, with respect to all female job classes for which pay equity does not exist according to the comparisons under section 12, describe how the compensation in those job classes will be adjusted to achieve pay equity; and

(e) shall set out the date on which the first adjustments in compensation will be made under the plan, which date shall not be later than,

(i) the second anniversary of the effective date, in respect of employers in the public sector,

(ii) the third anniversary of the effective date, in respect of employers in the private sector who have at least 500 employees on the effective date,

(iii) the fourth anniversary of the effective date, in respect of employers in the private sector who have at least 100 but fewer than 500 employees on the effective date,

(iv) the fifth anniversary of the effective date, in respect of employers in the private sector who have at least fifty but fewer than 100 employees on the effective date and who have posted a notice under section 20, and

(v) the sixth anniversary of the effective date, in respect of employers in the private sector who have at least ten but fewer than fifty employees on the effective date and who have posted a notice under section 20.

Idem

(3) A pay equity plan shall provide that the female job class or classes that have, at any time during the implementation of the plan, the lowest job rate shall receive increases in rates of compensation under the plan that are greater than the increases under the plan for other female job classes until such time as the job rate for the female job class or classes receiving the greater increases is equal to the lesser of,

(a) the job rate required to achieve pay equity; and

(b) the job rate of the female job class or classes entitled to receive an adjustment under the plan with the next lowest job rate.

Minimum adjustments

(4) The first adjustments in compensation under a pay equity plan are payable as of the date provided for in clause (2) (e) and shall be such that the combined compensation payable under all pay equity plans of the employer during the twelve-month period following the first adjustments shall be increased by an amount that is not less than the lesser of,

(a) 1 per cent of the employer’s payroll during the twelve-month period preceding the first adjustments; and

(b) the amount required to achieve pay

Renfrew County and District Health Unit v. Ontario Public Service Employees Union, 2002 CanLII 49456 (ON PEHT) 2002-03-27 — One issue between the parties was how to allocate, amongst members of the bargaining unit, pay equity adjustments if the amounts required to achieve pay equity exceed 1% of payroll in each year. At para. 4, the Tribunal held that an employer is required to consider all of its pay equity plans when calculating what adjustments are required in order to avoid unfairness in the application of adjustment payments under different plans.

Canadian Union of Public Employees, Local 2974.1 v. Essex (County), 1996 CanLII 8065 (ON PEHT) 1996-11-15 — The parties, in accordance with their intention to achieve internal equity along with pay equity, agreed that both male and female job classes would receive adjustments to their pay. At para. 47-54, the Tribunal stated that the application of 1% of previous years’ payroll towards internal equity violates section 13 of the Act, which provides for pay equity to the female job classes, and has the effect of widening the wage gap.

Regional Municipality of Peel v. Canadian Union of Public Employees, Local 966, 1992 CanLII 4698 (ON PEHT) 1992-10-15 — The Tribunal considered the employer’s argument that the cost of maintaining pay equity is to be included in the 1% of payroll available for pay equity adjustments. The 1% of payroll must be used to close the wage gap which existed as of the effective date and cannot be used toward the cost of maintaining pay equity and ensuring the wage gap doesn’t widen. Section 13(4) cannot be taken to mean that adjustments paid out include payments for situations in which the wage gap is widened after the pay equity plan is established, since the objective of the pay equity plan is to identify the wage gap and to correct the wage discrimination or wage gap identified.

Oakwood Retirement Communities Inc. v. S.E.I.U. Local 1 Canada, 2010 CanLII 76245 (ON PEHT) 2010-12-15 — A union sought to challenge a pay equity process undertaken by the employer under an agreement with the predecessor union. The tribunal found that the pay equity agreement with the predecessor union did not achieve pay equity for the employees in the bargaining unit and the new union was entitled to inquire about, and satisfy itself concerning the extent of pay equity compliance in the bargaining unit. The parties were free to enter into negotiations, and at para. 72, the Tribunal stated that the certification date of the union is the effective date for the purposes of wage adjustment retroactivity and the determination of job content of job classes.

Idem

(5) Adjustments shall be made in compensation under a pay equity plan on each anniversary of the first adjustments in compensation under the plan and shall be such that during the twelve-month period following each anniversary the combined compensation payable under all pay equity plans of the employer shall be increased by an amount that is not less than the lesser of,

(a) 1 per cent of the employer’s payroll during the twelve-month period preceding the anniversary; and

(b) the amount required to achieve pay

Kensington Village v. Service Employees International Union, Local 220, 2000 CanLII 22420 (ON PEHT) 2000-10-13 — The Tribunal refused an employer application asking them to revoke an order that the employer implement its pay equity plan by paying outstanding adjustments as required to maintain pay equity. The employer raised that it had not received funding from the Province of Ontario and thus should not have to pay the adjustments. At para. 21-24, the Tribunal held that the employer has an obligation to make adjustments even if funding is not received or even if an employer pleads financial hardship. An employer cannot contract out of their obligations under the Act.

Pay Equity Office v. Community Living Guelph Wellington, 2015 CanLII 16351 (ON PEHT) 2015-03-16 — This application concerned the issue of an employer that made the necessary pay equity adjustments in the beginning, then stopped due to lack of funding. The Tribunal refused to accept lack of funding as a defense to an employer’s failure to comply with the Act. At paras. 30 and 33 The Tribunal clarified that this section does not grant authority for the Tribunal to sanction non-compliance with the Act and that the Act has no provision providing for an Employer to avoid or delay the liability to make pay equity adjustments.

Ontario Nurses’ Association v. Brant County Health Unit, 1992 CanLII 4704 (ON PEHT) 1992-11-18 — The Tribunal was asked to consider whether it had the discretion to order more than 1% of annual payroll be directed toward pay equity adjustments. They held that they did not have that discretion and at paras. 13 & 14, they state that nothing in the Act compels an employer to pay more than 1% of the previous years’ payroll towards pay equity adjustments. An employer can agree to pay more than 1% but cannot be ordered to do so. The Act specifies when and in what circumstances an employer can be required to spend more than 1% of payroll per year on pay equity.

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. When considering how to interpret section 7, the Tribunal notes that it would be inconsistent with the underlying purpose and the entire scheme of the Act to allow employers to introduce wage grids that reduce the wages of female employees after having achieved pay equity. At para. 44 they note that such interpretation would not be appropriate, just as an employer’s inability to pay is an inappropriate consideration when it comes to compliance under the Act.

Pay Equity Office v. Sexual Assault Support Centre of Ottawa, 2016 CanLII 28877 (ON PEHT) 2016-05-12 — In their application, the employer claimed that they did not have the ability to pay the entire amount of the Order which they disputed. The employer noted it was not unwilling to comply, but that it was financially unable to meet the 30-day timeline of the Order. The Tribunal dismissed the application, stating that lack of funding is not a defence to an employer’s failure to meet its obligation to comply with the Act.

Maximum adjustments

  • Except for the purpose of making retroactive adjustments in compensation under a pay equity plan or unless required to do so by an order described in clause 36 (g), nothing in this Act requires an employer to increase compensation payable under the pay equity plans of the employer during a twelve-month period in an amount greater than 1 per cent of the employer’s payroll during the preceding twelve-month period. R.S.O. 1990, c. P.7, s. 13 (1-6).

Exception

  • Despite subsection (6), pay equity plans in the public sector shall provide for adjustments in compensation such that the plan will be fully implemented not later than the 1st day of January, 1998.

Transition, application

(7.1) Subsections (7.2) and (7.3) apply with respect to an employer in the public sector who has set out in a pay equity plan that was posted or in another agreement that was made before this subsection comes into force a schedule of compensation adjustments for achieving pay equity.

Same, bargaining agent

(7.2) If the employees to whom the plan or agreement applies are represented by a bargaining agent, the employer is not bound by the schedule set out in it if the employer gives written notice to the bargaining agent that the employer wishes to enter into negotiations concerning a replacement schedule.

Ontario Northland Transportation Commission v. Transportation Communications International Union, 1992 CanLII 4696 (ON PEHT) 1992-09- 30 — Although an agreed upon pay equity plan between a bargaining agent and an employer is a deemed approved plan, the Tribunal has jurisdiction to inquire into it in some situations. This includes reviewing a plan’s compliance where one party alleges a violation of the Act. At para. 18, the Tribunal notes that employers and bargaining agents cannot agree to something which contravenes the Act.

Ontario Northland Transportation Commission v. Pay Equity Hearings Tribunal, 1993 CanLII 5424 (ON PEHT) 1993-06-28 — This application was heard at the Divisional Court. The applicant alleged the Tribunal had no jurisdiction over deemed approved plans agreed upon by bargaining agents and employers. The Court disagreed and found that parties cannot contract out of the Act and rely on the deemed approval of a plan where a plan clearly contravenes the Act.

Same, no bargaining agent

(7.3) The employer is not bound by the schedule set out in the plan or agreement if the employees to whom it applies are not represented by a bargaining agent. 1993, c. 4,

  1. 7 (1).

Definition

  • In this section,

“payroll” means the total of all wages and salaries payable to the employees in Ontario of the employer.

Pay equity plan binding

  • A pay equity plan that is approved under this Part binds the employer and the employees to whom the plan applies and their bargaining agent, if any.

Management Board Secretariat, (1993) 4 P.E.R. 58 — When considering the scope of employees’ ability to complain, it is determined that the right to complain does not include complaints about contraventions of Part II of the Act where the plan is deemed approved. At para. 29, it is stated that the Act accords no role to represented employees with respect to the negotiation and implementation of pay equity. The bargaining agent exercises these rights on behalf of its members.

Group of Employees v. Ontario (Management Board Secretariat), 1999 CanLII 14827 (ON PEHT) 1999-03-05 — A group of employees alleged the deemed approved pay equity plan violated the Act. Pursuant to para. 6, complaints regarding a deemed approved plan must be grounded in a violation of Part I of the Act. At paras. 9.9-10, the Tribunal notes that some provisions of Part I are capable of exact determination, but some imply an exercise of discretion. Correctness is the proper standard when reviewing if a plan contravenes a precise provision of the Act, and reasonableness is appropriate when considering use of discretionary.

Fedoruk v. Thunder Bay Police Service, 2007 CanLII 62085 (ON PEHT) 2007- 01-16 — An employee was found to not have pleaded a prima facie contravention of the Act in their application. At para. 10, the Tribunal held that although they must consider the issue where a member of a bargaining unit alleges that a pay equity plan does not meet standards set out in the Act, deference must be given to negotiating parties. Many provisions of the Act cannot be exactly determined and discretion is given to the negotiating parties to make decisions. Specifically, the decision not to use the group of jobs the employee believed should be used for evaluation was within the scope of the negotiating parties’ discretion.

Munro v. Ottawa Heart Institute, 2004 CanLII 60148 (ON PEHT) 2004-05-13 — A group of employees represented by a union made an application complaining about the job evaluation process. At paras. 12-13, the Tribunal discussed that represented employees can only succeed in a job evaluation complaint against the employer and bargaining agent if they make out a prima facie case that the parties acted unreasonably with respect to job evaluation or comparison between female and male job class. The Act does not require internal equity nor comparisons between female job classes as desired by the complainants.

McNeil v. Kirkland Lake (Town), 2002 CanLII 49446 (ON PEHT) 2002-09-25 — An employee brought an application stating that the bargaining agent failed to negotiate the proper male comparator for her job class. At para. 32-37 and 46, the Tribunal declined to inquire further into the deemed approved plan because the applicant failed to make out a prima facie case. The applicant disagreed with the evaluation results and male comparator used but failed to make out a prima facie case of a contravention of Part I of the Act, under which the negotiating parties had acted within the scope of their discretion. The Tribunal declined to “pierce the veil” to examine a “deemed approved plan”.

Ottawa Board of Education v. Ontario Secondary School Teachers’ Federation, 1996 CanLII 7947 (ON PEHT) 1996-05-28 — At para. 24, the Tribunal discussed what deemed approval is and when it takes place. The same standard of review applies for both negotiated plans or plans implemented by the employer only. At para. 31, they state that deemed approval is not a certification at the plan fully complies with the Act however, the onus is put on the party challenging the plan to demonstrate a contravention of Part I of the Act when a deemed approval plan is challenged. The standard of review depends on whether the Act requires correctness or implies a range. Job evaluation and comparisons imply a range and therefore a complainant must show unreasonableness. For the facts of the case, see the case summary under s. 5.1(1).

Association of Professional Student Services Personnel v. Toronto Catholic District School Board, 2006 CanLII 61262 (ON PEHT) 2006-03-23 — The Applicant argued that the employer had to prove that the negotiators considered certain factors. At para. 24, the Tribunal notes that in the face of a deemed approved plan, if an Applicant is complaining about a provision of the Act which is subject to a reasonableness standard of review, the applicant must demonstrate that parties contravened the Act by agreeing to something that was unreasonable. Specifically, the standard for gender predominance is reasonableness, not correctness. As such, the employer was entitled to rely on the deemed approval and not required to provide evidence regarding bargaining of their pay equity plan

Quach v St. Christopher House and Canadian Union of Public Employees, Local 3393, 2012 CanLII 71616 (ON PEHT) 2012-11-15 — An employee made an application alleging that she was entitled to but did not receive a pay equity adjustment. At para. 16, the Tribunal states that a deemed approved plan is binding on the parties and bargaining unit members. They found that the applicant made a bald allegation with respect to the job evaluation results she disagreed with but failed to provide any facts in support of her allegations. Disagreement with job evaluation is not sufficient to make out a contravention of the Act.

Houston v. Centennial College, 2002 CanLII 49436 (ON PEHT) 2002-01-25 — A group of employees complained that the job class evaluation undertaken by the employer did not properly value some of their work. The relevant plan was deemed approved in January 1999. The Tribunal dismissed the application and noted that disagreement regarding job evaluation results does not make out a prima facie case of contravention against a deemed approved plan. Once a plan is deemed approved, subsequent events don’t open it up to objections.

Call-A-Service Inc v An Anonymous Employee, 2008 CanLII 88827 (ON PEHT) 2008-04-28 — This application asked the Tribunal to determine what constituted “changed circumstances” under the Act which required an employer to amend a deemed approved plan. At paras. 24-30, the Tribunal notes that maintenance of pay equity is an ongoing responsibility and changes due to maintenance do not open up a deemed approved pay equity plan to objections.

MacKay et al v. Brant Community Healthcare System, 2017 CanLII 37589 (ON PEHT) 2017-06-12 — The Tribunal dismissed an application of a group of employees alleging that in updating the relevant pay equity plan, their union and the employer violated the Act by the manner in which they valued a particular job class. Once a pay equity plan has been executed by the employer and the union, it is considered to be a deemed approved plan. Per para. 15, a deemed approved plan can only be challenged by section 22 of the Act which requires there to be a violation contrary to the Act or its Regulations.

Reynolds et al v. Southlake Residential Care Village, 2017 CanLII 59582 (ON PEHT) 2017-09-07 – A deemed approved plan will not be set aside. Challenging a deemed approved plan for a failure to act in accordance with the provisions under the Act, for whatever reason, is not an adequate reason to strike the deemed approved plan. Per para. 11, an executed pay equity plan between the Employer and Union will be deemed approved if no timely objection is made under the Act.

Maitland Manor Health Care Centre v. Mattuci, 2015 CanLII 67576 (ON PEHT) 2015-10-19 – The applicant objected to an order that concluded their non-union pay equity plan did not comply with the Act. At paras. 28 and 30, the Tribunal notes the review and objection periods available to employees. Where a pay equity plan has been posted in accordance with the Act, without objections, and implemented, it becomes a deemed approved pay equity plan in accordance with the Act despite defects in the plan. In particular, the Tribunal was concerned with the delay in any objection by 11 years after the plan was posted.

Plan to prevail

(10) A pay equity plan that is approved under this Part prevails over all relevant collective agreements and the adjustments to rates of compensation required by the plan shall be deemed to be incorporated into and form part of the relevant collective

Glengarry Memorial Hospital v. Ontario Nurses’ Association, 1991 CanLII 4447 (ON PEHT) 1991-06-06 — The employer applicant disputed an order that it alleged failed to incorporate pay equity adjustments into the collective agreement pursuant to this section. At para. 8, the Tribunal clarifies that this section requires the adjustments to rates of compensation required by the pay equity plan shall be incorporated into, and form part of the relevant collective agreements. The collective agreement would continue to operate as before but with the pay equity adjustments included in the rates of compensation. Section 13(10) enables the Tribunal to examine collective agreements and the payment of wage rates under it, to exercise its jurisdiction to determine whether a party has complied.

Deemed compliance

(11) Every employer who prepares and implements a pay equity plan under this Part shall be deemed not to be in contravention of subsection 7 (1) with respect to those employees covered by the plan or plans that apply to the employees but only with respect to those compensation practices that existed immediately before the effective R.S.O. 1990, c. P.7, s. 13 (8-11).

Regional Municipality of Peel (1992) 3 P.E.R. 191 — Any compensation practice occurring after the effective date which has the effect of widening the wage gap is a contravention of ss. 13(11) and 7(1). Employers are required to correct this contravention using funds in addition to the 1% of payroll which must be made available to reduce the wage gap. This maintenance obligation is separate from that imposed under ss. 13(4) and (5) which deal with adjustments to be paid out to narrow the wage gap, and which are limited to not less than 1% of payroll.

Law Society of Upper Canada v. Unknown Respondents, 1999 CanLII 14823 (ON PEHT) 1999-02-18 — The employer applied for an order revoking the Review Officer’s order that their pay equity plan contravened the Act by widening the pay gap after its effective date. The Tribunal determined that a wage gap which widens prior to the implementation date contained in the Act will result in a contravention of s. 13(11). Adjustments are required to redress the widening are payable immediately and not subject to the cap on payouts in s. 13(6).

Application

(12) If a pay equity plan is amended under section 1 or 14.2, subsections (9),

(10) and (11) apply, with necessary modifications, to the amended plan. 1993, c. 4,

  1. 7 (2).

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