by Paula Määttä

III. Canada

C. Measures for determining and promoting pay equality

1. Permitted grounds for wage differentials

Provincial and federal jurisdictions can also differ in the ways allowing for wage differences between male and female employees for work of equal value. It is not a discriminatory practice to pay different wages if the difference is based on an objective factor prescribed by guidelines issued by the Canadian Human Rights Commission. Sex alone, however, does not constitute an objective factor. For example, Ontario allows for such factors as merit, seniority, skill, shortages, red-circling (a procedure by which an employee is downgraded as a result of a re-evaluation of the position, but the employee's wages are temporarily fixed until the wages appropriate to the downgraded position are equivalent to the employee's current wages), temporary training assignments, and geographic wage differences. Variations also exist in regard to phasing-in periods and cost limits. The employer may not reduce wages in order to eliminate a difference in wages where employees perform work of equal value. (CCH Canadian Limited 1995, 417.; Gunderson 1994, pp. 33-34.)

2. Instruments used to promote equality

Job evaluation

Job evaluation is undertaken so that male-dominated and female-dominated jobs are first classified within the organisation. The Canadian jurisdictions differ with respect to the definition of female job class and male job class. Sometimes it is 70 per cent of either sex, sometimes 60 per cent of either sex, and sometimes 60 per cent female and 70 per cent male. In Ontario, female job class means a job class in which 60 per cent or more of the members are female while in the male job class the proportion reaches 70 per cent or more. Jobs are evaluated with a job evaluation scheme which are not permitted to discriminate against women. After this exercise, the male-dominated and female-dominated jobs are estimated by separate paylines, which help to establish the relationship between pay and job evaluation results. The criterion by which the value of jobs is to be measured is the composite of skill, effort, responsibility and working conditions. Pay in the undervalued female-dominated jobs is then adjusted to the pay of male-dominated jobs of comparable value, as established by the job evaluation procedure. (Gunderson 1994, p. 27.)

The example of Ontario

Usually job evaluation procedure is to be used in the pay equity process and should be "gender neutral". The jurisdiction of Manitoba and Ontario have written a job evaluation guide about how gender bias can be discovered in job evaluation.

Ontario's Pay Equity Act uses the term "job comparison" instead of "job evaluation". In the case Ontario Nurses Association v Municipality of Halimand-Norfolk (1991), the Pay Equity Tribunal pointed out in its decision that a gender neutral comparison system under the Ontario Act must be able to analyse and rectify systematic patterns of wage discrimination. To do this, particular attention must be paid to valuing the work of female job classes in order to ensure that the comparison system remedies the historical undervaluation of women's work. The Pay Equity Tribunal stated that a gender neutral comparison system positively identifies and values characteristics of women's work, and that it also must work deliberately to remove gender biases. Traditional job evaluation schemes have failed to record or to value the differences between women's work and men's work, which is very important for pay equity purposes. Traditional job evaluation often reinforces and perpetuates the attitudes which reward the skills and job content characteristics of male work and while giving less value to the skills and job content requirements of women's work. The Tribunal ruled that gender bias should be eliminated from all parts of the comparison system, and stated that gender neutrality must be assessed in both the design and the implementation of the comparison system to be used for pay equity purposes. The achievement of gender equality in pay structures requires the positive identification and valuing of women's work.

In Ontario, systematic gender discrimination is to be identified through comparisons between each female job class and male job class in an establishment in terms of compensation and the value of the work performed. The bargaining agent and the employer, or the employer alone, may designate a job class as predominantly male or female. They must consider the historical incumbency of the job class, gender stereotypes of fields of work, and any other criteria established by regulation. (CCH Canadian Limited 1995, pp. 430-431.)

The Pay Equity Hearings Tribunal of Ontario has set out the component parts of a gender-neutral job comparison system. There are four components: accurate collection of job information, deciding on the mechanism or tool to determine how the value will attach to the job information, applying the mechanism to determine the value of the work performed, and making the comparison. (CCH Canadian Limited 1995, p. 431.)

The Pay Equity Act of Ontario was amended in 1993 to introduce two additional approaches for making job comparisons: proportional value comparison and the proxy method of finding comparators outside the organization. Proportional value is a way to compare indirectly female and male job classes in the same establishment. It indicates the relationship between the value of the work performed and the compensation received by male job classes, and applies the same principles and practices to compensating female job classes. There are several ways to make proportional value comparison. The proportional value method allows the organization to determine the amount any male job class at any value would be compensated given the overall pattern of compensation of male job classes existing in the organization. (CCH Canadian Limited 1995, p. 433.)

The proxy method of finding comparators, discontinued by a 1996 amendment to the Act, allowed organizations that could not use job-to-job or proportional value comparisons to achieve pay equity. The proxy method allowed an organization to find male comparators for its female jobs in an outside organization. Only organizations that are in the broader public sector were able to use the proxy method. These organizations were to be in the female predominant sectors, such as child care. The proxy organization had to be found in the same geographic division and had to provide services similar to those of the seeking organization. The seeking organization was to carry out proxy comparisons by matching its key female job classes to similar female job classes in the proxy organization. The seeking organization then went through the similar proxy female job classes to identify the appropriate male comparator job rates in the proxy organization. In this way the seeking organization was able to find male comparators in the proxy organization. The proxy method is statutorily discontinued as of 1 January 1997. (CCH Canadian Limited 1995, pp. 433-434.)

In Ontario, the employer had to make a pay equity adjustment of a minimum of 1 per cent of the previous year's payroll until pay equity was achieved. With the 1996 amendment to the Pay Equity Act, however, these requirements were changed to provide that an employer using the proxy method must pay out a total adjustment of the lesser of 3% of the 1993 payroll, or the amount required to achieve pay equity. These adjustments had to be paid by 30 September 1996. The amendment also provided that any pre-existing schedule of pay equity adjustments may be amended to reflet the revised payment requirements. An employer must give affected employees and their bargaining agent, if any, written notice of the change. (Canadian Report to the ILO on Convention No 100 for the period July 1, 1993 to June 30, 1996, p. 4).

Pay equity plans

In Ontario, all public sector and private sector employers who employ 100 or more employees must prepare pay equity plans which set out information such as the gender-neutral comparison system used, all job classes which formed the basis of the comparison, the results of the comparison. Private sector employers with a minimum of 10 employers and no more than 100 employees are not required to prepare a pay equity plan but may choose to do so. However, small private sector employers will be required to make all necessary wage adjustments. Employers are not required to make pay equityadjustments exceeding 1 per cent of the previous year's payroll. "Payroll" means the total of all wages and salaries payable to the employees of the employer. (CCH Canadian Limited 1995, pp. 434, 437.)

Report on pay equity

In Nova Scotia, each public sector employer must file a monthly report with the Commission "setting out the progress in implementing pay equity". In Manitoba the Pay Equity Bureau is required to file a report once a year. In Nova Scotia and Prince Edward Island the Commission or Bureau submits a report on the implementation process every six months, and in Ontario the Commission makes an annual report to the Minister of Labour. (McDermott 1993, p. 57.)

3. Scope of comparison

The Pay Equity jurisdictions limit their job comparisons and pay equity practices to the employer's "establishment", which means that comparisons will not be made between the compensation provided by one employer and that provided by another.

Under Ontario's statute an establishment is defined as a corporate entity within a specific geographical region in relation to the county, district and regional boundaries of the province. For example, if an employer has an office in city A and another in city B, this would compose two different establishments which means that job comparison between men and women cannot be done.

In Manitoba, Nova Scotia and Prince Edward Island, the gender-neutral job evaluation scheme has to be utilised in the employer's establishment to cover both organised and non-unionised employees. In Ontario, however, unionised and non-unionised employees have different job evaluation schemes in establishments, which makes the comparison more complicated. In unionised female job classes, job comparisons have to be made first within the bargaining unit. If no male job class comparison is available, any male job class of comparable value within the establishment can be used instead for comparison. Similarly, jobs of non-unionised female job class are compared first to jobs of other non-unionised employees. If there is no male job class, the comparison can be made within the entire establishment. (McDermott 1993, p. 50.; CCH Canadian Limited 1986, p. 11.)