Appellate Court Confirms that Employers are not Obligated to Negotiate with Unions in Maintaining Pay Equity
Date: October 4, 2021
On September 21, 2021, the Ontario Divisional Court issued Ontario Nurses’ Association v. 10 Community Care Access Centres, an important decision on pay equity maintenance. The Court confirmed that a union, in the context of seeking a joint process with an employer to maintain pay equity, does not have a right to negotiate the maintenance of pay equity for the bargaining unit. The decision makes clear the long-accepted principle that under the Pay Equity Act (Act), maintenance of pay equity rests squarely on the shoulders of the employer.
The decision flows from an application for judicial review of a decision made by the Pay Equity Hearings Tribunal (Tribunal).
The applicant, the Ontario Nurses’ Association (ONA), is the bargaining agent that represents registered nurses and other healthcare professionals employed by the respondents, the 10 Community Care Access Centres (Centres).
By way of background, following the establishment of 43 Centres in 1998, new Pay Equity Plans were developed pursuant to the proxy comparison method and pay equity was achieved for the female job classes employed in the Centres.
In 2006, the 43 Centres were consolidated into 14 Centres, aligning with the geographic boundaries of the (at the time) newly established local health integration networks. Following the consolidation, ONA believed that the existing Pay Equity Plans were no longer appropriate and sought to negotiate new ones. Meetings were held between ONA and the Centres, in which the Centres took the position that they were not obligated to bargain the maintenance of pay equity with ONA. Accordingly, ONA filed complaints with the Pay Equity Office, alleging that the Centres had failed to maintain pay equity. The Review Officer issued 10 Orders, one in respect of each of the 10 Centres, stating that the employer had not maintained pay equity for all female classes. The Review Officer also found that in furtherance of maintaining pay equity, once established, the 10 Centres were not required to negotiate with ONA.
The 10 Centres then proceeded unilaterally with pay equity maintenance activities and once the work was completed, the relevant pay equity maintenance information was provided to ONA.
In particular, ONA took issue with the Review Officer’s finding that the employer was not obligated to negotiate with it in maintaining pay equity. Applications to the Tribunal were filed by ONA seeking to revoke the Review Officer’s Orders.
The Tribunal determined that maintenance, as set out in the Act, is not a joint or collaborative undertaking and is solely the responsibility of the employer. The Tribunal also noted that sections of the Act that allow for negotiations where circumstances have changed or a sale of business has taken place refer to “substantive and underlying change,” which does not capture the maintenance of pay equity.
Further, in response to ONA’s allegation that the case engages values under the Charter of Rights and Freedoms (Charter), the Tribunal found that the failure to require an employer to negotiate maintenance with a union does not transgress on the freedom of association as protected under the Charter.
The Decision of the Divisional Court
On judicial review, the Divisional Court found that the Tribunal’s decision was reasonable and that there is no obligation for the employer to negotiate with the union in maintaining pay equity.
The Court stated that the Act is clear that the responsibility to establish and maintain pay equity lies with the employer and not with the union. It noted that there are circumstances where the Act, in the face of substantive change, may allow for negotiations due to the fact that the pay equity plans in existence may no longer be appropriate. The first instance is where there are “changed circumstances” and the second instance is where there is a “sale of the business.” However, the Court disagreed with ONA that the amalgamations of the Centres fall within such an instance stipulated under the Act where negotiations are allowed.
In coming to its decision, the Court further commented that the Act is directed to resolving a form of systemic gender discrimination. Should the parties involved be unable to resolve the issue at hand, the issue is to be resolved by the administrative processes in place, which encompass the Pay Equity Commission and its Review Officers and the Tribunal. Accordingly, the Court found that based on the purpose and intent of the Act, “there is no exorable right, in a bargaining agent, to a negotiation of the maintenance of pay equity.”
Additionally, the Court found that the Charter and its values were not transgressed by the decision of the Tribunal. The Tribunal had reasonably concluded that the circumstances of the case did not pose any limitation on the freedom of association and that, even if it was wrong with respect to the question of limitation, the limit imposed is still proportionately balanced in relation to the objectives of the legislation.
Accordingly, the Court found the decision of the Tribunal to be reasonable and the application was dismissed.
Significance of the Decision
This decision confirms the fundamental principle that there is no statutory obligation on employers to negotiate with their bargaining agents when maintaining pay equity. We note that some employers may have contractually limited their right to unilaterally maintain pay equity and so careful consideration in any maintenance exercise should be taken to ascertain whether any such historical agreement to a joint process exists. If so, consideration may also be given to whether or not such processes ought to be continued.
The Court clarifies that in the context of maintaining pay equity, the role of the bargaining agent is to monitor and make complaints to the Pay Equity Commission. This positive decision for employers also affirms that the bargaining agent is not an equal partner in the provision and maintenance of pay equity and that the responsibility rests solely with the employer.
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