Quebec (AG) v Alliance. : Quebec’s Legislative Swing and Miss on Pay Equity Legislation

Introduction

The fight for pay equity has recently made headlines both around the word and here at home. In early 2018, Iceland passed legislation mandating that companies of 25 or more employees must prove that women are being paid fairly in comparison with their male counterparts or risk penalties and fines. Closer to home, the Association of Ontario Midwives recently received a historic ruling at the Human Rights Tribunal of Ontario. The September 2018 decision found that the female-dominated profession’s compensation was subject to gender-based discrimination from 2005 to 2013. Not all measures that aim to advance women’s rights, however, go as planned.

In May 2018, the Supreme Court of Canada [“SCC” or the “Court”] released its decision in Quebec (AG) v Alliance du personnel professionnel et technique de la sante et des services sociaux et al 2018 SCC 17 [Alliance]. (Note: the SCC also addressed Quebec’s pay equity legislation in a companion 2018 ruling, Centrale des syndicats du Québec v. Quebec (Attorney General), 2018 SCC 18. This decision will be considered in a subsequent post.) At issue in Alliance was the government of Quebec’s attempt to address those employers who had not complied with the Pay Equity Act, SQ 1996 [the “Act”]. In 2009, the Quebec government introduced amendments that eased an employer’s ongoing obligations to correct and maintain pay equity, while also implementing mandatory audits of each employer’s efforts to achieve pay equity every five years.

In a 6-3 ruling, the majority of the Court held that several of the Quebec government’s amendments to the Actwere in violation of section 15(1) of the Canadian Charter of Rights and Freedoms [Charter] and not saved under section 1. What we see in the reasons of both the majority and the dissent is the Court grappling once again with the parameters for the section 15(1) analysis, the division of powers, and the applicability of section 15(2). In Alliance, we see how section 15(1) analysis remains in development, both delicate and divisive.

Background to the Pay Equity Act, SQ 1996

The 1996 Act established a regime in which Quebec employers with 10 or more employees had to assess, report, and adjust compensation in accordance with the principle of equal pay for work of equal value. Once adjusted, this pay equity had to be maintained through the establishment of pay equity plans and committees, depending on the size of the workplace. But by the 2000s, the government of Quebec had a problem on its hands: employers simply were not complying with the Act to the degree required to achieve its purpose.

In 2009, the government introduced a series of amendments to the Act, designed to increase rates of compliance. Sections 40 through 43 of the Act, which stated a requirement that employers maintain pay equity once compensation was adjusted, were repealed. In their place, new provisions were introduced which created mandatory pay equity audits every 5 years. Adjustments in compensation, which were once available retroactively from the date the inequity arose, were now only available from the date the audit was posted (section 76.5). If a discrepancy in pay arose three years before the audit, employees would not be entitled to retroactive pay for that period (section 103.1 at para 2), except if the employer could be shown to have acted arbitrarily or in bad faith (section 76.9).

In response to these amendments, unions brought proceedings against the government of Quebec, arguing that the amendments violated section 15(1) of the Charter. Both the Quebec Superior Court and Court of Appeal ruled for the unions, finding that sections 76.5, 76.3 and 103.1 para. 2 violated section 15(1) and could not be justified under section 1.

The section 15(1) impasse

Section 15(1) of the Charter forms the basis for constitutional equality rights, affording all individuals equal protection and benefit under the law, free from discrimination based on any enumerated or analogous ground. Writing for the majority, Justice Abella reiterates the two-step test that she set out in Kahkewistahaw First Nation v Taypotat, 2015 SCC 30 [Taypotat]. The first step of the test asks: Has a distinction been made by the impugned provision that separates groups of people on the basis of the enumerated or analogous ground? Justice Abella emphasizes that here the “focus must remain on the groundsof the distinction” (Alliance, para 26). The second step of the test asks: Does this distinction in turn deny a benefit or impose a burden on the group in question? By keeping the two steps of the analysis as simple as possible, Justice Abella shifts the burden of proving a section 15(1) violation from the (ostensibly disadvantaged) group claiming discrimination to the government that must justify this infringement under section 1. This logic acknowledges and attempts to rectify the power imbalance between historically disadvantaged groups and the state with all its resources.

The majority in Alliance finds that the impugned amendments do indeed have a discriminatory effect on the very population whose systemic disadvantages the Act is ostensibly meant to address. Under the amendments, the fact that pay equity adjustments were available only from the time the audit was posted meant that women whose compensation is found to be lower than that of their male counterparts must wait five years for adjustment. Unless the employer can be shown to have acted in bad faith or arbitrarily (section 76.9), there was no option for retroactive payments between the posting of audits. Justice Abella notes, moreover, that while the wording of section 76.9 appears broad enough for employees and unions to seek relief, the same wording is found in Quebec’s Labour Code and there it is interpreted very narrowly to require the proving of malicious intent.

On the other hand, the dissent disagrees with the finding that the amendments perpetuate a disadvantage as well as with the finding that they prevent female employees from seeking. They argue that a mandatory system of audits every five years for all employers is better for the members of the disadvantaged group whose employers did not comply with the Act. But Justice Abella argues more persuasively on this point: accepting the dissent’s arguments means that “access will be denied to many in the hopes that it will become available for some” (Alliance, para 54). Far from being an improvement for those employees who, prior to the amendments, had access to retroactive payments from the date the discrepancy occurred, the new amendments perpetuate inequity.The impasse may well be explained by how the majority and the dissent respectively view the division of powers.

Division of powers – facilitators not bystanders

In assessing the constitutionality of the impugned amendments, the majority and the dissent wrestle with the Court’s role in upholding the Charter, while simultaneously respecting the freedom of the legislature to pass laws (good or bad). Justice Abella dismisses the union’s argument that the repealing of sections 40 through 43 of the Act was in itself unconstitutional. To make such a finding, the Court would be limiting the ability of the legislature to modify its own laws and would, moreover, “constitutionalize the policy choice embodied in the first version of the Act, improperly shifting the focus of the analysis to the form of the law, rather than its effects” (Alliance, para 33). This would clearly result in an instance of judicial overstepping, and furthermore, it would deviate from the section 15(1) two-step analysis which emphasizes the discriminatory effects of a law in its present state rather than in comparison to previous iterations.

Respect for the legislature’s power, however, certainly does not mean that the judiciary must throw up its hands and abandon its role in ensuring that legislation does not violate the Charter. In this capacity, Justice Abella observes, “the courts are facilitators in that enterprise, not bystanders” (Alliance, para 42). While the appellants argue that finding the impugned amendments to be in violation of section 15(1) would impose a positive obligation on the government (an argument accepted by the dissent), Justice Abella rejects this argument by simply stating that the government can introduce whatever legislation it likes so long as this legislation itself does not result in the discrimination of a disadvantaged group.

By contrast, the dissent – having not found the impugned amendments to be in violation of the Charter in the first place – emphasizes the deference the Court must show to the provincial legislature: “The choice to adopt this measure, which in any event ameliorates the conditions of the employees in question in comparison with the former scheme, belongs to the elected representatives of Quebecers and not to this Court” (Alliance, para 64). But the amendments were prompted not by the desires of Quebecers, nor by the lofty goal of pay equity itself. Instead, they were introduced in response to employers not complying with the Act.

On this point, the majority voices a wariness of the implications of removing the maintenance requirements for employers in favour of audits with no obligations in the intervening five years. To reduce the obligations of employers in response to noncompliance would be to reward, for lack of a better phrase, bad behaviour.  Justice Abella writes that this would convey “the policy message to employers that defiance of their legal obligations under the Act will be rewarded with a watering-down of those obligations. And it sends the message to female workers that it is they who must bear the financial burdens of employer reluctance” (Alliance, para 56).

Saved by the section 15(2)?

In R v Kapp, 2008 SCC 41 [Kapp], the Court stated that the purpose of section 15(2) is to protect ameliorative programs from claims of discrimination brought by groups other than the disadvantaged group intended to benefit from the legislation in the first place. While Justice Abella and the majority unequivocally dismiss the application of section 15(2) to the case at hand, the dissent curiously finds that even if the impugned amendments were found to be discriminatory under section 15(1), they would be protected under section 15(2) because of the Act’s ameliorative objective. According to the dissent’s reasons, since the goal of the amendments is the achievement of substantive equality and since mandatory audits every five years are better than non-compliance for some employees, the amendments leave the members of the protected group in better standing than the previous legislation. On this point, I find the dissent’s argument is based on a mistaken understanding of the function of section 15(2).

Section 15(2) is meant to protect ameliorative programs from non-disadvantaged groups claiming they are being denied a benefit from the government. In Kapp, section 15(2) was indeed applicable because the group claiming the discriminatory effect (non-Indigenous fishers) was not the disadvantaged group (Indigenous peoples) intended to benefit from the policy. On its face, the policy did indeed discriminate against non-Indigenous fishers on the ground of race or ancestry. With section 15(1) thus engaged, the government could defend this policy by invoking section 15(2) and demonstrating the policy’s ameliorative objective.

In Alliance, however, the dissent first acknowledges, in paragraph 76, the fact that a piece of ameliorative legislation could have the effect of exacerbating the discrimination experienced by a disadvantaged group. It proceeds, however, to find that the amendments in question are nevertheless protected by section 15(2) despite their discriminatory effects. On this count, the majority’s argument prevails both through its adherence to the approach outlined in Kapp as well as in its simplicity: “section 15(2) cannot bar s. 15(1) claims by the very group the legislation seeks to protect and there is no jurisprudential support for the view that it could do so” (Alliance, para 32). While the dissent identifies (and arguably creates) this potential “constitutional cul-de-sac” (Alliance, para 76), the majority does not condemn disadvantaged groups to enter it.

Concluding thoughts – so what does this all mean for pay equity legislation?

Despite the majority finding that the impugned amendments of the Act violate section 15(1), the issue of compliance with the Act specifically and pay inequity more generally persist. The majority does not entrench or constitutionalize pay equity as the dissent feared or as proponents hoped. For provincial legislatures, Alliance serves as a lesson in what not to do when it comes to addressing issues of non-compliance. While there remains no positive obligation on the government to create equality, there is little question in my mind that non-compliance must be addressed and legislation amended because pay inequity persists. This cannot, however, be done at the expense of the very workers whose compensation the legislation is trying to improve. The answer to the non-compliance question may lie in carefully crafted and implemented proactive legislation, or it may lie in the promotion of other social programs (affordable child care, better parental leave, to name a few).