SUPREME
COURT OF CANADA
Citation: Canada (Human
Rights Commission) v. Canadian Airlines International Ltd., [2006] 1
S.C.R. 3, 2006 SCC 1
|
Date: 20060126
Docket: 30323
|
Between:
Air Canada
Appellant
v.
Canadian
Human Rights Commission and Canadian Union
of
Public Employees (Airline Division)
Respondents
‑ and ‑
Attorney
General of Canada, Canada Post Corporation, Communications
Energy
and Paperworkers Union of Canada, Public Service Alliance of
Canada
and Federally Regulated Employers — Transportation and
Communication
Interveners
Coram:
McLachlin C.J. and Bastarache, Binnie, LeBel, Fish, Abella and Charron JJ.
Reasons for
Judgment:
(paras. 1 to 45)
|
LeBel and Abella JJ.
(McLachlin C.J. and Bastarache, Binnie, Fish and Charron JJ. concurring)
|
______________________________
Canada (Human Rights Commission) v. Canadian Airlines
International Ltd., [2006] 1 S.C.R. 3, 2006 SCC 1
Air Canada Appellant
v.
Canadian Human Rights Commission and Canadian Union
of Public Employees (Airline Division) Respondents
and
Attorney General of Canada, Canada Post Corporation, Communications,
Energy and Paperworkers Union of Canada, Public Service Alliance of
Canada and Federally Regulated Employers — Transportation and
Communication Interveners
Indexed as: Canada (Human Rights Commission) v.
Canadian Airlines International Ltd.
Neutral citation: 2006 SCC 1.
File No.: 30323.
2005: October 19; 2006: January 26.
Present: McLachlin C.J. and Bastarache, Binnie,
LeBel, Fish, Abella and Charron JJ.
on appeal from the federal court of appeal
Human rights — Discriminatory practices — Equal
wages — Definition of “establishment” — Federal human rights legislation making
it discriminatory for employer to pay different wages for men and women
performing work of equal value in same “establishment” — Whether flight
attendants, pilots and mechanics of airline company in same establishment for
purposes of wage comparisons — Whether employees subject to common personnel
and wage policy — Canadian Human Rights Act, R.S.C. 1985, c. H‑6,
s. 11 — Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.
Statutes — Interpretation — Guidelines — Guidelines
adopted to clarify interpretation of statute — Nature of relationship between
guidelines and statute — Canadian Human Rights Act, R.S.C. 1985, c. H‑6,
s. 11 — Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.
The flight attendants’ union launched a complaint
against the employer airline under s. 11 of the Canadian Human Rights
Act , claiming that the employer discriminated against flight attendants, a
predominantly female group, by paying them differently than mechanics and
pilots, who were predominantly male. Under s. 11, it is a discriminatory
practice for an employer to establish differences in wages between male and
female employees employed in the same “establishment” who are performing work
of equal value. According to s. 10 of the Equal Wages Guidelines, 1986
adopted under the Act, employees of an establishment include all employees
subject to a “common personnel and wage policy”. Addressing a preliminary
question, the Canadian Human Rights Tribunal found that the wages of the flight
attendants could not be compared to the wages of the other two groups since
they were not in the same “establishment”. It emphasized that the vast
majority of the employer’s wage and personnel policies applicable to the
employees in the three groups were found in separate collective agreements and
in branch‑specific manuals that applied only to a particular bargaining
unit. Given the differences between the policies as reflected in those
agreements and manuals, the Tribunal concluded that the flight attendants had
failed to prove a common personnel and wage policy, and dismissed the
complaint. On judicial review, the Federal Court—Trial Division upheld the
dismissal, but the Federal Court of Appeal allowed the union’s appeal.
Held: The appeal
should be dismissed. The matter should be remitted to the Canadian Human
Rights Commission to continue its investigation into whether there is wage
discrimination.
Under s. 10 of the Guidelines, which supplements
s. 11 of the Act, employees subject to a common personnel and wage policy
will be in the same establishment, regardless of whether they are subject to
different collective agreements or are in the same geographic location. The
search for a “common personnel and wage policy” is a factual inquiry into
whether the employer applies a common set of principles or takes a general
approach to its employment relationships, including collective bargaining.
Factors may vary from one employer to another, and a policy may be common even
if working conditions vary. At the end of the inquiry, if a common wage and
personnel policy is established, a notional establishment consisting of various
functions or occupational groups comes into existence, and it is then used to
identify the proper comparators for pay equity purposes. [27‑36]
[43]
The search for a “common personnel and wage policy” is
not an inquiry into every term of every collective agreement or employment
contract in search of a preponderance of common or disparate terms. While
the terms of collective agreements are not irrelevant, their relevance is
limited. By their very nature, these terms will vary with the imperatives of
the particular employee or bargaining unit. To use those differences as
barriers to wage comparisons would thwart the very purpose of s. 11.
Furthermore, if the inquiry were to focus on these differences, “establishment”
would be equated with “bargaining unit”, thereby undermining the purpose of the
Canadian Human Rights Act . [36] [39‑40]
In this case, the flight attendants, mechanics and
pilots belong to the same “establishment”. The employer has put in place a common
policy reflected in its common approach to collective bargaining, the
administration of labour contracts, its methods of communication with unions
and employees, and its common negotiating strategies and concerns.
Although the collective agreements of the groups differed and the common
policies may have been implemented in different ways, common policies remained
in place. [43‑44]
Cases Cited
Referred to: Bell
Canada v. Canadian Telephone Employees Association,
[2003] 1 S.C.R. 884, 2003 SCC 36; Canadian National Railway Co. v. Canada
(Canadian Human Rights Commission), [1987] 1 S.C.R. 1114; Canada
(Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146;
Bristol‑Myers Squibb Co. v. Canada (Attorney General), [2005] 1
S.C.R. 533, 2005 SCC 26; New Brunswick Broadcasting Co. v. Nova Scotia
(Speaker of the House of Assembly), [1993] 1 S.C.R. 319; British
Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3
S.C.R. 3; Parry Sound (District) Social Services Administration Board v.
O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42.
Statutes and Regulations Cited
Act to
amend the Canada Labour (Standards) Code, S.C. 1970‑71‑72,
c. 50.
Canada Labour Code, R.S.C. 1970, c. L‑1, s. 38.1 [rep. 1976‑77,
c. 33, s. 66].
Canada Labour (Standards) Code, S.C. 1964‑65, c. 38, s. 14a(1) [ad. 1970‑71‑72, c. 50, s. 8].
Canadian Charter of Rights and
Freedoms, s. 2 (d).
Canadian Human Rights Act, R.S.C. 1985, c. H‑6, ss. 11 , 27(2) .
Equal Wages Guidelines, 1986, SOR/86‑1082, s. 10.
Female Employees Equal Pay Act, S.C. 1956, c. 38, s. 4(1).
Authors Cited
Canada.
Canadian Human Rights Commission. Background notes on proposed guidelines —
equal pay for work of equal value. Ottawa: The Commission, 1985.
Canada.
Canadian Human Rights Commission. Equal Pay for Male and Female Employees
Who Are Performing Work of Equal Value — Interpretation Guide for
Section 11 of the Canadian Human Rights Act. Ottawa: The Commission,
reprinted May 1981.
Canada.
House of Commons. Minutes of Proceedings and Evidence of the Standing
Committee on Justice and Legal Affairs, Issue No. 11, May 17, 1977,
2nd Sess., 30th Parl., 1976‑1977, p. 11:46.
Canada.
House of Commons. Minutes of Proceedings and Evidence of the Standing
Committee on Justice and Legal Affairs, Issue No. 12, May 18,
1977, 2nd Sess., 30th Parl., 1976‑1977, pp. 12:19‑12:20.
Lavoie, Linda, et Myriam Trudel. Loi
sur l’équité salariale annotée. Cowansville, Qué.: Yvon Blais, 2001.
Morin, Fernand, et Jean‑Yves
Brière. Le droit de l’emploi au Québec, 2e éd. Montréal:
Wilson & Lafleur, 2003.
APPEAL from a judgment of the Federal Court of Appeal
(Rothstein, Nadon and Evans JJ.A.), [2004] 3 F.C.R. 663, 238 D.L.R. (4th)
255, 318 N.R. 201, [2004] CLLC ¶ 230‑022, [2004] F.C.J. No. 483 (QL),
2004 FCA 113, setting aside a decision of Hansen J., [2002] 1 F.C. 158,
209 F.T.R. 111, 202 D.L.R. (4th) 737, [2002] CLLC ¶ 230‑003, 41 C.H.R.R.
D/207, [2001] F.C.J. No. 1258 (QL), 2001 FCT 840, dismissing an application for
judicial review of a Canadian Human Rights Tribunal’s decision (1998), 34
C.H.R.R. D/442, [1998] C.H.R.D. No. 8 (QL). Appeal dismissed.
Roy L. Heenan, Q.C.,
and Rob Grant, for the appellant.
Andrew Raven, David
Yazbeck and Karen E. Ceilidh Snider, for the respondent the
Canadian Human Rights Commission.
Douglas J. Wray,
for the respondent the Canadian Union of Public Employees (Airline Division).
Anne M. Turley,
for the intervener the Attorney General of Canada.
Written submissions only by Brian A. Crane,
Q.C., and David P. Olsen, for the intervener the Canada
Post Corporation.
Written submissions only by Peter Engelmann,
for the intervener the Communications, Energy and Paperworkers Union of Canada.
Mary Cornish, for the
intervener the Public Service Alliance of Canada.
Sheila R. Block
and Kathleen E. L. Riggs, for the intervener the Federally
Regulated Employers — Transportation and Communication.
The judgment of the Court was delivered by
LeBel and Abella JJ. —
I. Overview
1
This pay equity case began almost 15 years ago. Yet our Court
must now dispose of a preliminary but important question. To determine whether
an employer is discriminating in remunerating male and female employees,
comparisons must inevitably be made among groups of employees. These
comparisons — assessing the relative skill, effort, responsibility and working
conditions involved in the occupational groups — may or may not result in the
conclusion that discrimination has taken place. But before they can be made, it
is necessary first to determine which group or groups of employees can be
compared under the relevant legislation. That preliminary question is now
before us.
2
The Canadian Human Rights Act, R.S.C. 1985, c. H-6 (the
“Act ”), administered by the Canadian Human Rights Commission, makes it
discriminatory for employers to pay different wages for men and women
performing work of equal value in the same establishment. According to one of
the Commission’s binding guidelines, employees are deemed to be employed in the
same establishment if they are subject to a common personnel and wage policy.
This appeal centres on what constitutes an “establishment” for purposes of the
Act and what it means to have a common personnel and wage policy. The issue is
whether flight attendants, mechanics and pilots belong to the same
establishment. If so, the female-dominated jobs of flight attendants can be
compared with the male-dominated occupations of mechanics and pilots in order
to determine whether women are being unlawfully underpaid, contrary to the pay
equity principles in the Act . For the reasons that follow, we conclude that
the Federal Court of Appeal correctly held that the “establishment” includes
all three groups. Accordingly, we would dismiss the appeal and remit the matter
to the Canadian Human Rights Commission for the continuation of its
investigation into whether there is wage discrimination.
II. Background
3
In November 1991, the Canadian Union of Public Employees (“CUPE”)
launched a complaint against Air Canada. It claimed that Air Canada
discriminated against flight attendants, a female-dominated group, by paying
them differently for what it argued was equally valuable work performed by
mechanical personnel and pilots, who were predominantly male. CUPE and the
Commission both submitted that personnel and wage policies are not found in
individual or collective contracts of employment, but in the general approach
taken by an employer to those contracts, regardless of differences in their
terms. If there is a common general approach, all employees subject to it form
part of the same establishment.
4
Air Canada, in response, argued that flight attendants could not
be compared to pilots and mechanics because the three groups of employees
belonged to three distinct bargaining units set up 60 years ago and were
covered by three separate collective agreements whose differences demonstrated
that the three groups were not subject to a “common personnel and wage policy”.
The three groups of employees were not in the same “establishment”, it argued,
since each of the three separate bargaining units constituted a separate
establishment. The essence of Air Canada’s submission was that collective
agreements are the defining sources of personnel and wage policies, and that
the common elements in them are what determine the extent to which different
groups of employees can be said to be subject to a common personnel and wage
policy.
5
Because of its position that the pilots and mechanics worked in
different “establishments” for purposes of the Act , Air Canada sought an order
from the Federal Court prohibiting the Commission from proceeding with its
investigation. Some time before the matter was to be heard, the parties agreed
to permit the Commission to investigate, as a preliminary question, whether the
flight attendants and the comparator groups were within the same establishment.
In its investigation, the Commission noted that the two comparator groups
identified — pilots and mechanics — were predominantly male, and that the
flight attendants who sought to compare themselves were predominantly female.
The Commission also confirmed that wages for flight attendants were lower than
for the two groups to which they compared themselves. The Commission recommended
that the “establishment issue” be referred to a Canadian Human Rights Tribunal.
6
A Tribunal was appointed on August 15, 1996. The only issue
before that Tribunal was the preliminary question of whether flight attendants,
pilots, and mechanics are in the same establishment for purposes of wage
comparisons. Other aspects of CUPE’s complaint, including notably the actual
comparison of the value of flight attendants’ work compared to that of pilots
and mechanics, were not addressed.
7
The Tribunal agreed with Air Canada that the wages of the flight
attendants could not be properly compared to those of the two other groups
since they were not in the same “establishment”. It emphasized that the vast
majority of Air Canada’s wage and personnel policies applicable to the
employees in the three groups were found in separate collective agreements and
in branch-specific manuals that applied only to a particular bargaining unit.
Given the differences between the policies as reflected in those agreements and
manuals, the Tribunal concluded that the flight attendants had failed to prove
a common personnel and wage policy and, accordingly, dismissed the complaint
((1998), 34 C.H.R.R. D/442).
8
On judicial review, the Federal Court — Trial Division
upheld the dismissal ([2002] 1 F.C. 158, 2001 FCT 840).
9
The Federal Court of Appeal (Rothstein, Nadon and Evans JJ.A.)
allowed the appeal ([2004] 3 F.C.R. 663, 2004 FCA 113). Rothstein J.A. held
that the focus of the “establishment” inquiry should be on what was within the
power or control of the employer. Finding that Air Canada treated all of its
employees as part of a single, integrated business under a common personnel and
wage policy, he concluded that the flight attendants, pilots and mechanics at
Air Canada were in the same establishment for the purpose of comparing their
wages. He held that the matter should be remitted to the Tribunal on the basis
that the groups of employees sought to be compared worked within the same
establishment.
10
In concurring reasons, Evans J.A. elaborated on the purpose
of human rights legislation and the background to the promulgation of the Equal
Wages Guidelines, 1986, SOR/86-1082, as compelling the conclusion reached
by Rothstein J.A. Evans J.A. relied on the facts that flight attendants,
mechanics and pilots all work in the core business of Air Canada, that
personnel and compensation issues are under the direction of the central human
resources division of Air Canada, that general corporate human resources
policies apply to all three groups, and that a single committee within Air
Canada is responsible for coordinating the process of negotiating collective agreements
with all three bargaining units.
III. Analysis
(1) The Legal Framework and the Issues
11
The Act establishes the legal framework for the application of
pay equity principles to employment relationships governed by federal law. Some
provincial legislatures have chosen to enact distinct laws and have set up
separate administrative and adjudicative processes to implement pay equity,
outside general human rights statutes, to address the particular form of
discrimination against women which denies them equal pay for work of equal
value (see, for example, L. Lavoie and M. Trudel, Loi sur l’équité salariale
annotée (2001)).
12
The Parliament of Canada took a different path. It incorporated
the principle of pay equity in the Canadian Human Rights Act itself. The
Act provides that maintaining wage differentials between male and female
employees doing work of equal value is a discriminatory practice. Section 11(1)
states:
11. (1) It is a discriminatory practice for
an employer to establish or maintain differences in wages between male and
female employees employed in the same establishment who are performing work of
equal value.
13
Section 27(2) authorizes the Commission to adopt guidelines
in order to bring more certainty and clarity to the interpretation of the Act .
It may
on application or on its own initiative, by order, issue a guideline setting
out the extent to which and the manner in which, in the opinion of the
Commission, any provision of this Act applies in a particular case or in a
class of cases described in the guideline.
Our Court has
held that such guidelines are regulations which complement the provisions of
the Act and should be read together with them (Bell Canada v. Canadian
Telephone Employees Association, [2003] 1 S.C.R. 884, 2003 SCC 36, at para.
48). Acting under this authority, the Commission adopted s. 10 of the Guidelines,
which was intended to complement s. 11 of the Act . Section 10 provides that
employees subject to the same wage and labour policies are deemed to be within
the same establishment, for the purpose of the implementation of s. 11 of the
Act :
10. For the purpose of section 11 of the Act ,
employees of an establishment include, notwithstanding any collective agreement
applicable to any employees of the establishment, all employees of the employer
subject to a common personnel and wage policy, whether or not such policy is
administered centrally.
14
In this Court, there was no challenge to the validity of s. 10 of
the Guidelines. The issue then becomes a question of statutory interpretation
in the context of human rights legislation. More particularly, the issue is the
interpretation of the word “establishment” found in both s. 11 of the Act and
s. 10 of the Guidelines. The correct interpretation of “establishment” will
allow the identification of appropriate comparators. Given the nature of its
principles and objectives, pay equity cannot be achieved without proper
comparators. The notion of establishment is central to the analysis because the
Act requires that the proper comparators be found within an “establishment”. We
must then determine the meaning or scope of this word when s. 11 of the Act is
read in conjunction with s. 10 of the Guidelines, using the relevant rules
of statutory interpretation.
(2) The Interpretation of Human Rights Laws
15
Narrow interpretations may sterilize human rights laws and defeat
their very purpose. Our Court cautioned against this risk in Bell Canada
in the course of reviewing aspects of the function of a Human Rights Tribunal, per
McLachlin C.J. and Bastarache J.:
In answering this question, we must attend not only
to the adjudicative function of the Tribunal, but also to the larger context
within which the Tribunal operates. The Tribunal is part of a legislative
scheme for identifying and remedying discrimination. As such, the larger
purpose behind its adjudication is to ensure that governmental policy on
discrimination is implemented. It is crucial, for this larger purpose, that any
ambiguities in the Act be interpreted by the Tribunal in a manner that
furthers, rather than frustrates, the Act ’s objectives. [para. 26]
16
In Canadian National Railway Co. v. Canada (Canadian Human
Rights Commission), [1987] 1 S.C.R. 1114, at p. 1134, Dickson C.J.,
acknowledging the unique purpose of human rights legislation, held that “the
words of the Act must be given their plain meaning, but [that] it is equally
important that the rights enunciated be given their full recognition and
effect” and held that remedial statutes like the Act are to be given “such
fair, large and liberal interpretation as will best ensure that their objects
are attained”.
17
The object of s. 11 of the Act is to identify and ameliorate wage
discrimination. This purpose guides its interpretation. As Evans J. stated in Canada
(Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146
(T.D.), at para. 199:
[N]o interpretation of section 11 can ignore the fact that the mischief
at which it is principally aimed is the existence of a wage gap that
disadvantages women, as a result of gendered segregation in employment and the
systemic undervaluation of the work typically performed by women.
(3) A Short History of Federal Pay Equity
Legislation
18
Equal pay legislation was first passed by Parliament in 1956 (Female
Employees Equal Pay Act, S.C. 1956, c. 38), mandating that an employer not
pay men and women differently for substantially identical work. Section 4(1) of
that Act stated:
4. (1) No employer shall employ a female
employee for any work at a rate of pay that is less than the rate of pay at
which a male employee is employed by that employer for identical or
substantially identical work.
19
The original legislation guaranteed only equal pay for equal
work. All of an employer’s employees were covered. This limited principle was
superseded in the current Act , passed in 1977 (S.C. 1976-77, c. 33), which
moved to a new paradigm of obliging employers to maintain equal pay for work of
equal value. The gap between those two iterations of Canada’s equal pay
legislation was bridged, to some extent, by amendments in the early 1970s to
the Canada Labour Code .
20
In 1971, in the Act to amend the Canada Labour (Standards)
Code, S.C. 1970-71-72, c. 50, the 1956 legislation was repealed and
replaced by equal pay provisions in the Canada Labour (Standards) Code,
S.C. 1964-65, c. 38, introducing for the first time the concept of the same
establishment, rather than the same employer. The new s. 14a(1) of the Code provided:
14a.
(1) No employer shall establish or maintain differences in wages between
male and female employees, employed in the same industrial establishment,
who are performing, under the same or similar working conditions, the same or
similar work on jobs requiring the same or similar skill, effort and
responsibility.
Comparisons
could only be made within “the same industrial establishment”.
21
In 1977, as part of the package of legislative amendments
introducing the Canadian Human Rights Act, s. 14a (then s. 38.1 ) was removed from the Canada Labour Code,
R.S.C. 1970, c. L-1. The “industrial establishment” limitation was carried
forward into the “establishment” limitation in s. 11 of the Act . This amendment
meant that pay equity comparators had to be found within each employer and
within those sets of functions or activities which were distinct enough to be
acknowledged as a separate establishment. As the Minister of Justice, the
Honourable S. R. Basford, said at the time:
We used “establishment” because it has been used in
the Labour Code, and there is a body of case law, both of the Labour Relations
Act and of the Courts, relating to the use of those words. It was a word that
caused some concern among some presenting briefs, in that employers could
divide their establishments in order to set up different wage scales in those
establishments. Therefore, it was urged that we use the words “same employer”
but that creates real difficulties in terms of regional wage scales and
regional and geographic factors.
(House of Commons, Minutes of Proceedings and Evidence of the
Standing Committee on Justice and Legal Affairs, Issue No. 12, May 18,
1977, at pp. 12:19-12:20)
22
Shortly after, the Commission issued a
non-binding interpretation guide limiting “establishment” by geographic
boundaries:
“Establishment” refers to all
buildings, works or other installations of an employer’s business that are
located within the limits of a municipality, a municipal district, a
metropolitan area, a county or the national capital region, which ever is the
largest, or such larger geographic limits that may be established by the
employer or jointly by the employer and the union.
(Equal Pay for Male and Female Employees Who Are
Performing Work of Equal Value — Interpretation Guide for Section 11 of the
Canadian Human Rights Act (1981), at p. 4)
23
Under this interpretation guide, until the enactment of the Equal
Wages Guidelines, 1986, “establishment” in s. 11 of the Act was understood
to mean an integrated, geographically coherent business belonging to a specific
employer, making the starting point of the establishment analysis under the Act
an essentially corporate definition, limited only by geography. That meant that
only where an employer’s business represented multiple and distinct
undertakings, or became geographically diverse, could multiple establishments
exist within an employer’s business.
(4) The Impact of Section 10 of the Equal
Wages Guidelines, 1986
24
In introducing the guideline power and the Act itself (Bill C-25)
in 1977, the Hon. S. R. Basford acknowledged that, in the arena of equal pay
for work of equal value, some provinces had been deterred by the complexity of
going beyond the old standard of equal pay for equal work, and explained the
resulting federal approach found in the new 1977 Act and guideline-making power
as follows:
The federal government has adopted a different approach: that we should
legislate the principle [of equal pay for work of equal value] and, through the
Commission and through its efforts at setting out guidelines, solve those
problems.
(House of Commons, Minutes of Proceedings and Evidence of the
Standing Committee on Justice and Legal Affairs, Issue No. 11, May 17,
1977, at p. 11:46; see also Canada (Attorney General) v. Public Service
Alliance of Canada, at paras. 77‑78.)
25
As a result of these changes, equal pay issues are now determined
in accordance with s. 10 of the Guidelines passed by the Commission in 1986
pursuant to s. 27(2) of the Act . Section 10 is repeated here for ease of
reference:
10. For the purpose of section 11 of the Act ,
employees of an establishment include, notwithstanding any collective agreement
applicable to any employees of the establishment, all employees of the employer
subject to a common personnel and wage policy, whether or not such policy is
administered centrally.
This new and
binding guideline no longer referred to geographic limitations.
26
A question now arises as to the nature of the relationship
between the Guidelines and the Act . Before this Court, Air Canada argued that
the Guidelines’ definition of “establishment” supplants the definition of
establishment found in s. 11 of the Act and that it is therefore unnecessary to
examine s. 11 of the Act or the history of its application. The Commission, on
the other hand, submits that s. 10 of the Guidelines is not exhaustive of the
meaning of “establishment” for purposes of the Act .
27
The interpretation advanced by Air Canada does not
accurately describe the legal relationship between the Guidelines and the Act .
The Guidelines complement the Act but do not abrogate it. As this Court
concluded in Bell Canada, such Guidelines are binding and intended to
“ad[d] precision to the Act , without in any way trumping or overriding the Act
itself” (para. 48). The Guidelines were enacted to enable the Commission to add
clarifying supplements, where necessary, to the leanly articulated principles
in the Act . The purpose of s. 10 of the Guidelines is, accordingly, to
supplement, not supplant, the provisions of the Act . It goes without saying,
therefore, that the Guidelines should be interpreted in a way which remains
consistent with the text and objectives of the Act (Bristol-Myers Squibb Co.
v. Canada (Attorney General), [2005] 1 S.C.R. 533, 2005 SCC 26, at para.
38).
28
The wording itself of s. 10 makes it clear that it does not purport
to define “establishment”. Instead, it states that, for purposes of s. 11 of
the Act , “employees of an establishment include” all of an employer’s
employees who are subject to a common personnel and wage policy, regardless of
any collective agreement and regardless of whether the common policy is
centrally administrated. Section 10 operates as a guide or complementary
provision which provides additional content and context for the application of
the notion of “establishment”. The fact that “establishment” in s. 10 of the
Guidelines is said to “include” employees who are subject to common personnel
and wage policies indicates that this particular guideline should not be viewed
and applied as if it were an exhaustive definition: see New Brunswick
Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993]
1 S.C.R. 319, at p. 376-77. This conclusion was reached by the Tribunal and it
is a conclusion with which we agree.
29
Having concluded that s. 10 of the Guidelines does not provide
the only cartography for discovering the meaning of “establishment”, we turn to
its intended impact. When the Act was passed in 1977, “establishment” in s. 11
was, as previously discussed, understood to have a particular meaning, namely
an integrated geographically coherent business, as confirmed by the non-binding
guide of 1978. Since the 1986 Guidelines cannot be interpreted as overriding
any provision of the Act , the issue is the extent to which s. 10 of the
Guidelines refined the meaning of “establishment” in s. 11 of the Act .
30
The background to s. 10's implementation is illuminating. First,
despite some proposals to that effect, the notion of “establishment” was not
removed from the Act . Establishments still had to be identified and comparators
found within them. Then, in March 1985, the Commission issued background notes
which indicated that the proposed guideline was intended to represent a new
approach to the meaning of establishment. The new guideline looked beyond
bricks and mortar, formal organizational units or geography. It adopted a
fall-back position, which focussed on the common character of compensation and
personnel policies. The Commission stated:
Establishment will be determined by reference to the personnel and
compensation policies and practices of the employer rather than a geographic
location or unit of organization.
Employees of an employer shall be considered to be in the same
establishment when they are subject to a common set of personnel and
compensation policies, regulations and procedures; and when these policies,
regulations and procedures are developed and controlled centrally even though
their administration may be delegated to smaller units of organization.
[Emphasis added.]
(Background notes on proposed guidelines — equal pay for work of
equal value (March 1985), at p. 22)
31
The rationale advanced by the Commission for this change was:
This approach addresses for example, the situation where employees in
different physical locations or regions are subject to the same collective
agreement. With a geographical definition of establishment it might be possible
to limit the scope of a remedy to the geographic or organizational unit where
the complainant is located, even when there are others subject to the same
conditions in other locations. [p. 11]
32
Following invitations to interested parties to respond to its
proposed change in the interpretation of “establishment” in s. 11 of the Act ,
the Commission received a number of submissions from both employer and union
representatives. As a result of these submissions, the Commission reformulated
its proposed directive on the notion of establishment as follows in September
1985, clarifying that even employees in different geographic locations could be
deemed to be in the same establishment and that the scope of collective
bargaining units and the contents of agreements would not be the determinative
factor:
Employees of an employer shall be considered to be in the same
establishment when they are subject to a common corporate policy which is
controlled centrally even though their administration may be delegated to
smaller units of organization. For greater certainty, a collective
agreement between an employer and a bargaining agent is not considered to be a
corporate personnel and compensation policy. [Emphasis added.]
33
In an accompanying memorandum sent to members of the Commission,
the head of its Equal Pay Section, T. N. Ulch, confirmed that the intention was
to rebut the suggestion that each collective agreement represented a separate
establishment:
[T]he language of the guideline on establishment will be changed to
ensure that it reflects the intent of the Commission to define establishment as
broadly as possible. There was concern expressed that the present wording
could be interpreted in a sense that would limit an establishment to a single
collective bargaining unit; [Emphasis added.]
34
While the final language of s. 10 of the Guidelines is somewhat
different from the September 1985 proposal, the two earlier proposed drafts,
when read with the language ultimately found in s. 10, reflect a consistent
intention: all employees subject to the same “common set of personnel and
compensation policies, regulations and procedures”, “common corporate policy”,
or “common personnel and wage policy”, will be in the same establishment,
regardless of whether those employees are subject to different collective
agreements and regardless of whether they are in the same geographic location.
No longer were geographically diverse businesses immunized from the definitional
reach of “establishment” in s. 11 of the Act , if and when a common policy
applied to them.
35
This, therefore, is the key refinement polished by s. 10 of the
Guidelines: regardless of regional or geographical differences, or of
differences in collective agreements, employees may nonetheless be found to be
in the same establishment pursuant to s. 11 of the Act if they are subject to a
common wage and personnel policy.
(5) Common Wage and Personnel Policy
36
Given this interpretation of “establishment”, the issue is
whether an employer has actually put in place a common policy. The search for
the “common personnel and wage policy” is a factual inquiry as to whether there
is a common set of principles or a general approach taken by an employer to its
employee/employer relationships, including collective bargaining. It is not,
with respect, an inquiry into every term of every collective agreement or
employment contract in search of a preponderance of either common or disparate
terms. Moreover, given the nature of the collective bargaining process and the
give and take inherent in it, the contents of the agreement may not entirely
reflect the policies of the employer. The investigation, we repeat, is not so
much into the collective agreements, as into those policies, methods and
objectives of the employer itself, which could be considered a “common policy”.
A policy may be common, even if working conditions vary. If the common
character of the policies, methods and objectives is established, a notional establishment
consisting of various functions or occupational groups comes into existence,
which is then used to identify the proper comparators for pay equity purposes.
37
The phrase “common personnel and wage policy” in s. 10 of the
Guidelines is neither as complicated as Air Canada suggests, nor as
restrictive. We would not adopt a pure test of control, which might become
formalistic. Nor would we sanction the use, without more, of a notion of a
“guiding mind”, which could lead to the application of a pure corporate control
test and, in effect, abrogate the legal requirement that there be an
establishment. Nevertheless, the object of the inquiry remains the employer and
the employment objectives it seeks to implement. The expression “a common
personnel and wage policy” connotes the existence of core objectives which are
achieved by establishing the working conditions of employees, including those
governed by collective agreements. This is how the Commission has always interpreted
“establishment”, an approach common sense and legislative purpose combine to
endorse. It is regrettable that Air Canada has resisted this pragmatic
definition of “common personnel and wage policy” for almost 15 years, creating
enormous expense for itself and the public, and intolerable delay in wage
equity, should the flight attendants ultimately succeed.
38
The purpose of s. 10 of the Guidelines is to attach a pay equity
obligation in relation to those employees comprised within a “policy unit”. Where
a group of employees is subject to such a common policy, the employer’s
responsibility under the Act is to ensure that equal pay for work of equal
value is maintained, as between those employees, even if the work in different
sectors is governed by separate collective agreements. On the other hand, where
an employer has a business in which wage and personnel matters are dictated by
different policies in different sectors, it is difficult to see how that
employer would be required to ensure equal pay between those sectors.
39
This is not to say that the terms of collective agreements are
irrelevant, but only that their relevance is limited. The question is the
existence of common policies and objectives governing the bargaining process on
behalf of the employer. The nature of the underlying bargaining policy and of
its impact and constraint on the bargaining process is of more salience than
the actual terms ultimately negotiated. This is so particularly since, by their
very nature, the terms of employment contracts and collective agreements will
vary with the imperatives of the particular employee or bargaining unit. To use
those differences as barriers to wage comparisons would thwart the very purpose
of s. 11 of the Act , namely to determine whether differences in wages between
male- and female-dominated bargaining units or job classifications are
discriminatory.
40
If the inquiry were to focus on differences in the terms of
collective agreements, as suggested by Air Canada, workplaces would be exempt
from the very comparisons the Act contemplated. “Establishment” would be
equated with “bargaining unit”, thereby undermining the purpose of the Act ,
namely to determine whether wages paid to women reflect an underevaluation
based on systemic discrimination resulting not only in occupational
segregation, but also in diminished bargaining strength, and, likely,
diminished wages and benefits. As this Court said in British Columbia
(Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R.
3, at para. 42, in the human rights context, an interpretation by which “the
edifice of systemic discrimination receives the law’s approval . . . cannot be
right”.
41
In the end, the interpretive approach advanced by Air Canada
would turn collective bargaining into a tool to consolidate discriminatory
practices. Freedom of association is a basic constitutional right protected by
s. 2 (d) of the Canadian Charter of Rights and Freedoms . The
present methods of union certification and collective bargaining have been long
and well established. Labour codes seek to give a large scope to the freedom of
collective bargaining, in order to attain a degree of balance as well as of
stability and peace in labour relations. Nevertheless, collective bargaining
does not operate in a vacuum and labour agreements are not interpreted and
applied in a void. They are constrained by a legal environment which, among
other things, prohibits discriminatory practices (F. Morin and J.-Y. Brière, Le
droit de l’emploi au Québec (2nd ed. 2003), at pp. 973-77). Pay equity may
well impact on the conduct or outcome of negotiations as part of a legal
environment which parties must factor into the collective bargaining process.
Human rights principles often become part of collective agreements, explicitly
or implicitly (Parry Sound (District) Social Services Administration Board
v. O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157, 2003 SCC 42).
42
Moreover, because “establishment” is merely a threshold issue, it
cannot have been intended to be the subject of protracted investigation into
the terms of the myriad agreements, manuals, policies and guidelines by which
employees are governed. It is by no means clear what the harvest of the
comparison will eventually be. The details of collective agreements and other
specific features of the employment relationship are more relevant when the
actual comparisons are made, rather than being used to thwart the possibility
of those comparisons. Finding and evaluating the proper comparators belongs to
the core functions of the Commission and of the Tribunal.
43
Based on the common wage and personnel policies applicable to the
employees in the three groups, we are of the view that they work in the same
establishment, as the Federal Court of Appeal held. Sufficient indicia
demonstrate the existence of a common wage and personnel policy, which applies
to the three bargaining units. Factors may vary from one employer to another.
In the case of Air Canada, despite the structure and history of its labour
relations, the three units make up an establishment within the meaning of s. 11
of the Act .
44
The Federal Court of Appeal found that the policy statements of
Air Canada established a common set of general policies in respect of the
management of its labour relations, informing the particular relations with
each group of employees. These statements reflected a common approach to
collective bargaining, the administration of labour contracts and methods of
communication with unions and employees. Air Canada also took care to safeguard
common negotiation strategies and concerns, as appears from the document “Air
Canada’s Labour Relations Policy and Principles”, of May 22, 1991. Agreements
differed. Common policies may have been implemented in different ways, but
common policies remained in place and, as a result, there is an establishment
made up of, among others, pilots, mechanics and flight attendants. The relevant
comparators may properly be sought in this establishment.
IV. Disposition
45
Accordingly, the appeal is dismissed with costs throughout.
Because this disposes of the preliminary question assigned by the Commission to
the Tribunal, the matter is remitted to the Commission for the continuation of
its pay equity investigation.
Appeal dismissed with costs.
Solicitors for the appellant: Heenan Blaikie, Montréal.
Solicitors for the respondent the Canadian Human Rights
Commission: Raven, Cameron, Ballantyne & Yazbeck, Ottawa.
Solicitors for the respondent the Canadian Union of Public Employees
(Airline Division): Caley & Wray, Toronto.
Solicitor for the intervener the Attorney General of
Canada: Deputy Attorney General of Canada, Ottawa.
Solicitors for the intervener the Canada Post
Corporation: Gowling Lafleur Henderson, Ottawa.
Solicitors for the intervener the Communications, Energy and
Paperworkers Union of Canada: Sack Goldblatt Mitchell, Ottawa.
Solicitors for the intervener the Public Service Alliance of
Canada: Cavalluzzo Hayes Shilton McIntyre & Cornish, Toronto.
Solicitors for the intervener the Federally Regulated Employers —
Transportation and Communication: Torys, Toronto.