Supreme Court of Canada finds Quebec pay equity legislation violates Charter of Rights
Centrale des syndicats du Quebec v. Quebec (Attorney General), 2018 SCC 18
Quebec (Attorney General) v. Alliance du personnel professionnel et technique de la sante et des services sociaux, 2018 SCC 17
Summary
In two recent decisions, the Supreme Court of Canada considered the whether several provisions of Quebec province’s gender pay equity legislation, the Pay Equity Act 1996 (Act), were contrary to section 15 of the Canadian Charter of Rights and Freedoms (Charter).
The Quebec regime is designed to address systemic wage discrimination against women. In both cases, the Court analysed whether the law violated the “equality rights” set out in section 15(1) of the Charter, in one case finding a violation that was nonetheless justifiable, and in the other a violation and breach of the Charter.
Background
The Act was introduced in 1996 to deal specifically with gender pay inequity. The intent of the Act was to more adequately address systemic aspects such as those arising from historical attitudes towards the role of women in the workplace, stereotypical assumptions regarding women’s aspirations, preferences, capabilities and suitability for certain jobs, and the pay disparities between male-dominated jobs and female-dominated jobs within the same workplace.
The Act requires employers to regularly assess pay equity between employees of the opposite sex, and adjust pay to address any inequity identified, by applying the assessment and adjustment mechanisms outlined in the Act.
As is the case with all Canadian legislation, the provisions of the Act must not violate any rights or fundamental freedoms guaranteed in the Charter. Section 15(1) of the Charter provides that:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
In both cases discussed below, the Supreme Court assessed whether the provisions in question violated section 15(1) by applying the following two-limbed test:
does the challenged law, on its face or in its impact, draw a distinction based on an enumerated or analogous ground?; and
if the answer to (1) is ‘yes’, does the law impose burdens or deny a benefit in a manner that has the effect of reinforcing, perpetuating or exacerbating disadvantage, including historical disadvantage?
If the two step test is satisfied, the question is then whether the provisions can be saved by section 1 of the Charter which provides that the rights in the Charter are “subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”.
Centrale des syndicats du Quebec v Quebec (Attorney General) 2018 SCC 18
Facts
In this case, the Supreme Court was required to consider the validity of section 38 of the Act, which was challenged by several unions on the basis that it violated section 15(1) of the Charter.
Section 38 was part of a set of provisions dealing with the assessment and adjustment processes applicable to employers of women in female-dominated roles in workplaces where there was no male comparator groups. After it had become apparent that there was no methodology in the Act to assess pay equity in those circumstances, the Pay Equity Commission (Commission) was tasked with developing one and enacting regulation to effect it. Section 38 provided that once the regulations were implemented, employers in workplaces with no male comparator groups had a two year grace period within which to put in place compliant assessment and adjustment processes.
The legislation prevented the Commission from passing regulations implementing the methodology until the end of 2001, and the regulations were not promulgated until 2005. This delay, combined with the two year grace period in section 38, meant that in practice there was a legislated six year delay to women in workplaces without male comparator groups gaining the same access to pay equity as women in workplaces with male comparator groups.
Decision
The trial judge concluded that section 38 of the Act did not draw a distinction based on sex, but rather on the basis of the absence of a male comparator groups, and therefore did not violate section 15(1) of the Charter.
A majority of the Supreme Court disagreed with the trial judge’s conclusion, finding that the section did draw a distinction based on sex, namely, a distinction between male employees and underpaid female employees, whether or not those male employees were in the same workplace. This finding meant the first limb of the two step test was satisfied.
In relation to the second limb, the majority held that section 38 imposed the burden of the effect of pay discrimination, without a remedy, for the period of the delay, on women in workplaces without male comparator groups and thereby perpetuated the disadvantage faced by those women.
Accordingly, the section satisfied the second limb of the two step test and was prima facie in violation of section 15(1). The fact that the Act was intended to help those women did not attenuate the fact of the breach.
However, despite the violation of section 15(1), four of the five-judge majority on that point found that the violation was justifiable, and therefore permitted by operation of section 1 of the Charter. They accepted that the delay in developing and implementing a credible methodology for adjustments for workplaces without male comparators groups was rationally connected to the objective of creating the possibility of an effective remedy for pay discrimination against female employees in those workplaces, and impaired the rights of those women as little as reasonably necessary. Essentially, the majority found the harm was outweighed by the overall advantages of the scheme.
Accordingly, the challenge was unsuccessful.
Quebec (Attorney General) v Alliance du personnel professionnel et technique de la sante et des services sociaux 2018 SCC 17
Facts
This case concerned amendments to the Act introduced by the Government of Quebec in 2009 which were designed to make compliance with the pay equity regime less burdensome on employers. These steps were taken after it became apparent that only 47 percent of companies were complying with the Act.
The amendments replaced the continuous obligation to maintain pay equity (by ongoing assessment and adjustment), with mandatory audits every five years. The relevant provisions provided that:
adjustments in compensation would only apply from the date of the posting of the results of an audit, not retroactively (s 76.5);
an employer was not required to make known the date at which the pay inequity requiring adjustment had emerged (s 76.3); and
no compensation adjustments could be assessed by the Commission prior to the date of the audit posting (s 103.1(2)).
Despite section 76.3, if an employer had acted “in bad faith or in an arbitrary or discriminatory manner”, adjustments would be applicable retroactively from the date of that conduct onward.
The amendments were challenged by an alliance of unions who sought a declaration that sections 76.3, 76.5 and 103.1(2) of the Act violated section 15 of the Charter.
Decision
By a six–three decision, the Supreme Court upheld the conclusion of the trial judge and the Court of Appeal that the provisions in question violated section 15(1) of the Charter.
Applying the two step test, the majority concluded the provisions satisfied the first limb because they targeted women in redressing the pay discrimination they have suffered and therefore drew a distinction based on sex.
The second limb was also satisfied according to the majority, because the denial of the benefit of pay equity legislative mechanisms for up to five years perpetuated the pre-existing disadvantage of women and therefore had a discriminatory impact. Specifically, this was because the effect of the provisions was to:
make the employer’s obligations “partial”;
leave inequities in pay uncorrected until the next audit;
prevent retroactive compensation; and
deny women information they needed to challenge pay inequity before the Commission.
Accordingly, the unions had established a prima facie violation of section 15(1). The court considered but rejected the proposition that the provisions could be saved by other sections of the Charter.
The rejection was based in part on a technical interpretation of section 15(2) of the Act and its relationship to section 15(1). However the majority also concluded that none of the impugned provisions could be justified under section 1 of the Charter. It accepted that reducing an employer’s obligations could theoretically be seen to be rationally connected to the purpose of increasing employer compliance, but concluded that there was no evidence that other means of achieving compliance would be ineffective, and accordingly, the scheme did not impair female employees’ equality rights as little as reasonably possible. The potential benefits did not outweigh the harmful effects.
The findings of invalidity made by the trial judge and the Court of Appeal were therefore upheld.
Commentary
Most western liberal democracies have taken steps to attempt to remedy the issue of the persistent gap between remuneration for men and women in the workforce.
These two cases emphasise that formulating effective legislative mechanisms to address the disparity is not a straightforward exercise.
In Australia, changing societal expectations have prompted increased support for a legislative mechanism to address the gender pay gap. However, Quebec’s attempts to address the issue of gender pay equity are much further advanced than those in Australia.
Here, at a federal level, employers have obligations under the Workplace Gender Equity Act 2012 (Cth) which contains annual reporting obligations and requires certain employers to have formal policies or strategies in place to support gender equity. The Sex Discrimination Act 1984 (Cth) also makes it unlawful for an employer to provide less favourable terms and conditions of employment to an employee “because of” their sex, and such conduct could also contravene provisions of the Fair Work Act 2009 (Cth). However, there is no legislative pay adjustment mechanism or requirement in place of the kind implemented in Quebec.
This difference in approach is in part because Canada is one of the few countries that have taken steps to constitutionally enshrine international human rights law: indeed, section 15 of the Charter largely reflects article 26 of the International Covenant on Civil and Political Rights. Unlike Canada, Australia does not have a charter of rights, or equivalent instrument, at the federal level, and those in place at the state level are more limited in their application and effect.
As is demonstrated by the cases summarised above, legislatively enshrined rights can play an effective role in ensuring that the legislature does not unjustifiably limit the rights and freedoms of its citizens.
The full text of the decision in Centrale des syndicats du Quebec v. Quebec (Attorney General), 2018 SCC 18 is available in English here.
The full text of the decision in Quebec (Attorney General) v. Alliance du personnel professionnel et technique de la sante et des services sociaux, 2018 SCC 17 is available in English here.
Caitlin Brown is a Senior Associate, Hector Sharp is a Lawyer and Cassie Mortimer is a Graduate at Norton Rose Fulbright.