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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.
In the Act, "bargaining agent" means a trade union as defined in the Labour Relations Act that has the status of exclusive bargaining agent under that Act in respect of any bargaining unit or units in an establishment and includes an organization representing employees to whom this Act applies where such organization has exclusive bargaining rights under any other Act in respect of such employees [1. (1)].
"Collective agreement" means an agreement in writing between an employer and a bargaining agent covering terms and conditions of employment [1. (1)].
What are the employer's and union's pay equity responsibilities?
Unions and employers are regularly engaged in collective bargaining. Much of this negotiation is salary and benefits related. For purposes of the Act, the main responsibility of union and employer is to ensure that the results of their compensation bargaining do not have the effect of contravening the Act  by making arrangements that do not meet the minimum requirements of Part I of the Act.
Where the employer is subject to Part II of the Act, and the workplace was unionized at the date of implementation, the law imposes a joint obligation on the employer and the existing bargaining agent to negotiate in good faith and endeavour to agree upon aspects of the pay equity process for the bargaining unit plan [14. (2)–(3)], including:
- the gender neutral comparison system;
- the pay equity plan for unionized employees;
- the definition of the establishment which may include two or more geographic divisions;
- the gender of job classes (female, male, gender neutral);
- the value of the job classes;
- the representative group of male job classes for proportional value;
- the calculation of job rate and
- the amount and distribution of pay equity adjustments.
How is bargaining strength used to explain gender wage differences?
According to the Act, differences in pay between female and male job classes are allowable if the differences can be attributed to differences in bargaining strength:
- After pay equity has been achieved in an establishment, the Act does not 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 differences in bargaining strength [8. (2)].
The Tribunal has noted that the defence of bargaining strength could not be raised to explain wage differences until the employer had achieved pay equity for all employees in its establishment. York Region Board of Education v. CUPE, Local 1734, 1995 CanLII 7202(ON PEHT)).
While the Act does not specifically define "differences in bargaining strength," the Tribunal has interpreted bargaining strength to mean the ability of a bargaining unit to exercise power on behalf of all its members. In this case, the preferred interpretation refers to difference between different bargaining units, as opposed to differences within the same unit. Furthermore, due to the remedial purpose of the Act, any exception should be narrowly defined and the onus is on the employer to provide evidence that conditions do in fact exist that warrant the application of the exception BICC Phillips Incorporated v. Group of Employees, 1997 CanLII 12223 (ONPEHT); Stevenson Memorial Hospital v. OPSEU, Local 360, 2000 CanLII 22419 (ON PEHT).
What happens when a union becomes certified as the bargaining agent for a group of employees in an establishment after a deemed approved plan?
If an employer was required to post and implement a pay equity plan in accordance with Part II or Part III of the Act, the plan is considered deemed approved by the Commission. It remains a deemed approved pay equity plan even if a bargaining unit becomes certified. Employers are required to disclose information to the bargaining agent about how the employer achieved pay equity.
While certification of a bargaining unit is considered a change in circumstances, it does not automatically require that a new or amended plan be negotiated. The original plan is split into two plans: a plan for the bargaining unit and one for the non-bargaining unit employees. This approach was ordered in the case of Ontario Nurses' Association v. St. Joseph's Villa, 1993 CanLII 5412 (ONPEHT) where the Tribunal said: "…our order extends to the form of the Plan only, and not to its content or the comparison system on which it is based".
A bargaining agent or an employer may view the split plan as being inappropriate for the bargaining unit. A bargaining agent may also be of the view that the split plan does not meet the requirements of Part I.
Disclosure of information
Employers are obliged to disclose sufficient information to allow the union to properly represent its employees. The Tribunal has ordered that any information related to implementing or maintaining pay equity must be disclosed to the bargaining agent. Although the Act does not specifically indicate what information is required or when the information must be disclosed in the bargaining process, the Tribunal has ruled that the information requested must be relevant or related to pay equity. Furthermore, both parties are entitled to sufficient information which may include information about jobs outside the bargaining unit Ontario Public Service Employees Unionv. Cybermedix Health Services Ltd., 1989 CanLII 1459 (ON PEHT) and Oakwood Retirement Communities Inc. vs. S.E.I.U. Local 1 Canada, 2010 CanLII 76245 (ON PEHT).
Q&As Unionized Workplaces
1. Do companies need to set up joint employer/union committees to do pay equity?
No. The use of pay equity committees is not required by law. If an employer and union choose to create a committee, they are free to do so.
2. Do agreements concerning pay equity have to be ratified by the union?
No. There is no requirement in the Act for union ratification. The union constitution may address this issue.
3. Can pay equity be negotiated at the same time as regular collective agreements?
There is no requirement in the Act for ongoing pay equity negotiations or for the parties to have a particular system in place to deal with pay equity matters. Some employers and unions discuss pay equity during collective bargaining; some do not. Some employers and unions negotiate terms under which they will deal with pay equity issues; others have no process in place. Unions and employers must ensure that any changes or agreements reached in collective bargaining do not have adverse pay equity consequences.
4. What is the impact of pay equity adjustments on collective agreements?
The Act indicates that pay equity prevails over all relevant collective agreements. Any adjustments to rates of pay are incorporated into the relevant collective agreements; this does not require that the collective agreement be renegotiated in order to be effective.
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