[1] The issue in this appeal from the Trial Division (as it then was) is whether groups of employees are in the same establishment for purposes of subsection 11(1) of the Canadian Human Rights Act, R.S.C. 1985, c. H-6 (the Act) and section 10 of the Equal Wage Guidelines, 1986, SOR/86-1082 (EWG, 1986 or the Guidelines).

FACTS

[2] In 1991 and 1992, the Canadian Union of Public Employees (CUPE) filed complaints with the Canadian Human Rights Commission (CHRC or Commission) against Air Canada and Canadian Airlines International Ltd. (together referred to as Air Canada), alleging wage discrimination against the predominantly female flight attendants, as compared to two predominantly male employee groups - first and second officers (pilots) and technical operations personnel.

[3] A preliminary issue is whether the three employee groups are in the same establishment, a requirement for application of section 11 of the Act. By a decision dated December 15, 1998, a Canadian Human Rights Tribunal (Tribunal) found that the three employee groups were not in the same establishment. As a result, the Tribunal found that the complaints could not proceed. (Canadian Union of Public Employees (Airline Division) v. Canadian Airlines International Ltd., [1998] C.H.R.D. No. 8.)

[4] By order dated July 27, 2001, the Trial Division dismissed the judicial review application of the appellant and CUPE. This is an appeal from that decision. (Canada (Canadian Human Rights Commission) v. Canadian Airlines International Ltd. (T.D.), [2002] 1 F.C. 158).

[5] This appeal was heard on March 25 and 26, 2003. On April 1, 2003, Farley J. of the Ontario Superior Court of Justice issued an Order under the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36 staying all legal proceedings outstanding against Air Canada. Paragraph 70 of that Order provided in part:

THIS COURT REQUESTS the aid and recognition of any court or any judicial, regulatory or administrative body in any province or territory of Canada ... and the Federal Court of Canada ... to act in aid of and to be complementary to this Court in carrying out the terms of this order.

[6] By Notice of Motion dated April 17, 2003, Air Canada sought a stay of any further proceedings in this appeal, including the delivery of judgment. This Court, by Order dated June 13, 2003, stayed delivery of judgment in this appeal until the expiry of the stay period ordered by Farley J. On December 10, 2003, Farley J. ordered "that the stay of proceedings provided by the Initial Order shall be and is hereby lifted for the purpose of allowing the Federal Court of Appeal to release its Judgment and Reasons for Judgment [in this appeal] and for no other purpose." By letter dated December 11, 2003, this Court was informed of the lifting of Farley J.'s stay order and this Court's stay order expired by reason of its own terms.

STANDARD OF REVIEW

[7] The parties agree that the appropriate standard of review to be applied to the Tribunal's decision is correctness. The Tribunal was engaged in an issue of statutory interpretation - the meaning of establishment in subsection 11(1) of the Act and what the statute and the Guidelines required or permitted the Tribunal to consider to determine if employee groups are in the same establishment. Curial deference does not apply to a tribunal's interpretation of human rights legislation. See Canada (Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146 at paragraph 73 per Evans J. (as he then was).

RELEVANT STATUTORY PROVISIONS

[8] Subsection 11(1) of the Act provides that it is a discriminatory practice for an employer to maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value. Subsection 11(1) provides:

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.

11. (1) Constitue un acte discriminatoire le fait pour l'employeur d'instaurer ou de pratiquer la disparité salariale entre les hommes et les femmes qui exécutent, dans le même établissement, des fonctions équivalentes.

[9] Section 10 of the EWG, 1986 is intended to provide guidance as to the meaning of "establishment" in the application of subsection 11(1) of the Act. Section 10 provides:

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.

10. Pour l'application de l'article 11 de la Loi, les employés d'un établissement comprennent, indépendamment des conventions collectives, tous les employés au service de l'employeur qui sont visés par la même politique en matière de personnel et de salaires, que celle-ci soit ou non administrée par un service central.

[10] The EWG, 1986 were issued pursuant to the authority granted to the Commission under subsection 27(2) of the Act to issue guidelines. Subsection 27(2) provides:

27 (2) The Commission 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 class of cases described in the guideline.

27 (2) Dans une catégorie de cas donnés, la Commission peut, sur demande ou de sa propre initiative, décider de préciser, par ordonnance, les limites et les modalités de l'application de la présente loi.

[11] Subsection 27(3) provides that the guidelines are binding on the Commission and a tribunal. Subsection 27(3) provides:

27(3) A guideline issued under subsection (2) is, until it is revoked or modified, binding on the Commission and any member or panel assigned under subsection 49(2) with respect to the resolution of a complaint under Part III regarding a case falling within the description contained in the guideline.

27(3) Les ordonnances prises en vertu du paragraphe (2) lient, jusqu'à ce qu'elles soient abrogées ou modifiées, la Commission et le membre instructeur désigné en vertu du paragraphe 49(2) lors du règlement des plaintes déposées conformément à la partie III.

There have been challenges to the EWG, 1986, most recently in Bell Canada v. Canadian Telephone Employers Association, [2003] 1 S.C.R. 884, 2003 SCC 36">2003 SCC 36. However, the Supreme Court has found that the EWG, 1986 were validly made.

THE PAY EQUITY PROCESS

[12] If a predominantly female group of employees wishes to compare itself to a predominantly male group of employees and demonstrates that both groups are in the same establishment, a complaint under subsection 11(1) of the Act can proceed to a determination of the merits of the complaint. Generally, an inquiry into the merits entails an evaluation of the work performed by the employee groups and a comparison of the wages paid to the employees in each group. It is the preliminary determination that both employee groups are in the same establishment that permits the matter to proceed to a determination on the merits.

DECISION OF THE TRIBUNAL

[13] The Tribunal was asked to determine whether the three employee groups were in the same establishment. To do so, the Tribunal was required to consider the term "establishment" in subsection 11(1) of the Act. The Tribunal rejected a corporate definition of establishment, finding that such a definition would equate an establishment with an employer. The Tribunal concluded that a corporate definition was not envisaged by the wording or intent of section 11 of the Act. Rather, it focussed on whether the employee groups sought to be compared were subject to common personnel and wage policies. It held that "the search for common personnel and wage policies must include collective agreements negotiated in bargaining units" (paragraph 91). At paragraph 94 the Tribunal wrote:

Therefore, a logical and functional definition of "establishment" in the context of section 11 of the CHRA as "guided" by the ambiguous provisions of section 10 of the E.W.G., 1986, would be that establishments can be defined as functional units where employees are covered by common wage and personnel policies, including general human resources policies, but not excluding consideration of collective agreements in unionized workplaces.

[14] Having regard to collective agreements and branch specific manuals and, notwithstanding Air Canada's general human resource policies and negotiating strategy that may apply to all employees, the Tribunal found that the Commission and CUPE had failed to demonstrate "any semblance of common wage and personnel policies across bargaining units" (paragraph 100). The Tribunal concluded that the three employee groups were not in the same establishment for purposes of subsection 11(1) of the Act and that, therefore, the complaint could not proceed. At paragraph 100 of its reasons, the Tribunal wrote:

This Tribunal finds that the present bargaining units at Air Canada and Canadian Airlines comprised of pilots, flight attendants and technical operations employees negotiate separate collective agreements which contain the vast majority of the wage and personnel policies applicable to each of the functional branches of the respondent companies. These collective agreements, taken together with the branch specific manuals, prevent the creation of a single establishment comprising the pilots, flight attendants and technical operations at Air Canada and Canadian Airlines. The existence of general human resource policies and common negotiating strategies at each of the respondent companies that may apply to all employees, unless superseded by the relevant collective agreement, cannot by themselves establish a single establishment comprising the pilots, flight attendants and technical operations at each of the respondent companies. The Commission and the complainant have substantially failed to demonstrate any semblance of essential common wage and personnel policies across the bargaining units.

ANALYSIS

1. The "Same Establishment" and "Common Personnel and Wage Policy"

Requirements Cannot Be Ignored

[15] The Act itself provides little assistance in determining the meaning of establishment. All that is known from the language of subsection 11(1) is that an establishment is confined to a single employer and that while an establishment may be equivalent to the employer, alternatively, it may only be equivalent to a subset of the employer. But there is no guidance in the Act as to how to determine the subset.

[16] However, section 10 of the EWG, 1986 is intended to assist in answering this question. It is clear that the Guidelines do not leave it open to an employee group to select, for comparison, any other employee group of the employer. Rather, section 10 mandates the identification of a common personnel and wage policy in order to find that the employee groups are in the same establishment for the purposes of the discrimination analysis under subsection 11(1) of the Act.

[17] Section 10 is ambiguous. Moreover, I am not convinced that "common personnel and wage policy" is an ideal basis for determining whether employees are employed in the same establishment. Nonetheless, by reason of subsection 27(3) of the Act, section 10 is binding and must guide the Commission and Tribunal in any determination of whether employee groups sought to be compared are in the same establishment. Although interpreting this section may be difficult, it is a task the Court must undertake.

[18] The Commission argued, and I agree, that human rights legislation should be construed broadly and purposively and that the Guidelines should not be used to hinder or undermine the purpose which is sought to be achieved by section 11 of the Act. However, a broad and purposive approach to interpretation does not give a tribunal or a court licence to ignore words of a statute or, in this case, binding guidelines, in order to prohibit discrimination at large.

[19] In Gould v. Yukon Order of Pioneers, [1996] 1 S.C.R. 571, Iacobucci J., for the majority, wrote at page 585:

On the subject of the appropriate interpretive approach for human rights statutes, the need to approach the legislation purposively, giving it a fair, large and liberal interpretation with a view to advancing its objects, is well accepted. But it is also well established that the wording of the statute is an important part of the process.

Iacobucci J. then referred at page 586 to the explanation given by Lamer C.J. in University of British Columbia v. Berg, [1993] 2 S.C.R. 353 at 371:

However, on the other hand, as the Chief Justice explained, at p. 371,

[t]his interpretive approach [i.e., a broad, liberal and purposive approach] does not give a board or a court license to ignore the words of the Act in order to prevent discrimination wherever it is found. While this may be a laudable goal, the legislature has stated, through the limiting words in s. 3 [i.e., the phrase "customarily available to the public"], that some relationships will not be subject to scrutiny under human rights legislation. It is the duty of boards and courts to give s. 3 a liberal and purposive construction, without reading the limiting words out of the Act or otherwise circumventing the intention of the legislature.

A true purposive approach looks at the wording of the statute itself, with a view to discerning and advancing the legislature's intent. Our task is to breathe life, and generously so, into the particular statutory provisions that are before us.

A purposive approach to interpreting legislation does not allow the Court to give effect to a policy the Court thinks is appropriate without paying due attention to the words adopted by Parliament.

[20] The broad purpose of section 11 of the Act is to preclude wage discrimination on account of gender. However, subsection 11(1) of the Act and section 10 of the EWG, 1986 prescribe which employee groups may be compared for purposes of the discrimination analysis. The analysis is to be restricted to an establishment of a single employer. An establishment is defined as including all employee groups subject to a common personnel and wage policy. These words cannot be ignored.

2. Section 10 Limits "Establishment" to Employees Subject to a Common Personnel

and Wage Policy

[21] In oral argument, the Commission submitted that the use of the word "include" in section 10 means that an establishment includes, but is not limited to, employee groups subject to a common personnel and wage policy. If this is correct, an establishment could be found even where the employee groups being compared are not subject to a common personnel and wage policy.

[22] Implicit in what the Commission argues is that the subject of the verb "include" is the singular noun "establishment." If this were the case, the Commission's position would be plausible. An establishment would include all employee groups subject to a common personnel and wage policy and could include other groups as well. However, the verb used is "include" and not "includes." As between the possible subjects, "employees" or "establishment," it is obvious that the verb "include" relates only to the plural "employees" and not the singular "establishment." The words "... the employees of an establishment include ... all employees subject to a common personnel and wage policy ..." must be read to limit the employee groups of a single establishment to those subject to a common personnel and wage policy.

[23] I do not think it would be logical for the Guidelines to have identified a common personnel and wage policy as the criterion for specifying the membership of an establishment for purposes of subsection 11(1) of the Act if the intention was that employee groups not subject to a common personnel and wage policy could also be part of the same establishment.

3. The Terms of Collective Agreements Are Irrelevant

a) The Guidelines Use the Term "Policy" not "Policies."

[24] The precise meaning of the term "personnel and wage policy" is not readily ascertainable from the Guidelines. Other than knowing that the policy pertains to personnel matters and wages and that it need not be administered centrally, the Guidelines give little indication of what is meant by the term.

[25] Determining whether the employee groups at issue are in the same establishment is a precursor to the substantive exercise of comparing the value of work being performed and the respective remuneration being paid to members of the groups at issue. The precise details of working conditions and remuneration, including benefits, found in the collective agreements are matters to be considered at the substantive stage. I therefore agree with the Commission that the definition of establishment should not be based on the myriad of details found in collective agreements.

[26] This view is supported by the fact that the singular term "policy" and not the plural "policies" is used in section 10. The Tribunal often used the term "common wage and personnel policies" in its reasons. Under that approach, the Tribunal found at paragraph 91 of its reasons that "the search for common personnel and wage policies must include collective agreements negotiated in bargaining units."

[27] I need not decide whether, had the Guidelines used the term "policies," the Tribunal could have compared the wage and personnel policies contained in the respective collective agreements. The Guidelines use the term "policy" and therefore that conclusion was not open to the Tribunal.

b) Comparison Cannot Be Practically Impossible.

[28] Furthermore, at least to some extent, there will always be differences between the detailed wage and personnel policies in collective agreements applicable to employee groups performing different jobs. I do not think it was the intent of section 10 of the EWG, 1986 to restrict comparisons to groups whose collective agreements contain identical wage and personnel policies. Such an interpretation would make comparisons impossible in a practical sense. The EWG, 1986 cannot be read to contemplate the impossible.

c) The Focus Should Be On the Policy of the Employer

[29] The broad purpose of subsection 11(1) of the Act is to eliminate wage discrimination in the workplace between male and female employees. It is the employer who caused the alleged discrimination and presumably has the power to fix it. Therefore, the focus of the establishment analysis should be on the employer, either as a whole or in part.

[30] This focus is supported by terms in section 10 that refer to the employer, such as "subject to" and "whether or not such policy is administered centrally." It is therefore more appropriate to focus on a policy of the employer rather than on policies contained in collective agreements which are bargained between the employer and employee groups.

[31] Given the need to focus on a policy of the employer, it is necessary to have regard to what remains within the control of the employer. Interpreting section 10 in line with this approach, I would construe "policy" to mean the general principles or approach by which the employer is guided in employment matters and specifically wage and personnel matters.

[32] In order to share a common personnel and wage policy, the employee groups being compared must be subject to the same general principles or approach guiding the employer in wage and personnel matters. That is, there must be evidence that the employer treats the employee groups as being part of a single, integrated business. If there is such evidence, the employees are in the same establishment. In such a case, an inquiry looking more closely at the details of the nature of their work, their working conditions and their remuneration is then justified.

d) Focussing on the Policy of the Employer Does Not Equate Establishment

With Employer

[33] The Tribunal was concerned with not equating establishment with employer, which would ignore the express provisions of subsection 11(1). Under the approach discussed above, however, not all employers need consist of one establishment. The Commission suggested the example of a conglomerate in which, although the employer is the same, there is no common personnel and wage policy between employee groups in different divisions of the conglomerate. As well, I would not rule out other circumstances. The question is whether the employer has the same general principles or approach to personnel and wage matters for the groups sought to be compared. If it has, they are in the same establishment.

e) The Drafting History of the Guidelines Does Not Mandate Consideration

of the Details of Collective Agreements

[34] Nonetheless, having regard to the consultation process leading to the EWG, 1986, Air Canada argued that section 10 does not preclude consideration of the details of the collective agreements. In the consultation process conducted by the Commission leading to the finalization of the EWG, 1986, submissions were received from both labour and management groups. The labour groups expressed concern that the Guidelines not restrict comparisons from being made between different bargaining units. Management groups suggested that each collective agreement should constitute a separate personnel and compensation policy.

[35] Preliminary drafts of the Guidelines by the Commission appear to have explicitly excluded the consideration of collective agreements in determining whether employees were in the same establishment. The final version of section 10 of the EWG, 1986 is silent on that issue. Air Canada says this recognizes that consideration of collective agreements is not necessarily excluded when determining whether groups of employees are subject to a common personnel and wage policy.

[36] I do not arrive at the same conclusion. While section 10 does not expressly exclude consideration of collective agreements (and here I agree with the Tribunal and the Trial Division Judge's textual analysis of the phrase "notwithstanding any collective agreement applicable to any employees of the establishment" in section 10), neither does it mandate their consideration. The question is one of interpretation and for the reasons I have given, I have concluded that consideration of the details of collective agreements at the stage of determining whether employees are employed in the same establishment is premature.

4. Application to the Facts

[37] For these reasons, I think that the Tribunal was in error when it had regard to the details of the collective agreements of the pilots, technical operations personnel and flight attendants to determine if they are in the same establishment. Rather, the Tribunal should have examined whether the same general principles or approach guided the employer in personnel and wage matters affecting the groups in question. Applying this approach, I turn to the evidence.

[38] A document entitled "Air Canada's Labour Relations Policy and Principles" dated May 22, 1991, is, I think, conclusive of the issue. It is written at a high level of generality. It deals with personnel and wage matters. It is applicable to Air Canada employees and unions and makes no distinction between different groups of employees.

[39] The document speaks of a single mission for Air Canada as a whole, namely "to excel in profitability"and it refers specifically to recognizing the legitimacy and legal status of the certified bargaining agents of Air Canada employees "throughout the organization." Because I think it is dispositive of this appeal, I quote the document at length:

Air Canada has a stated mission to excel in profitability, in customer service and in individual performance.

Positive labour relations will assist in the achievement of this mission and is therefore good business in addition to fulfilling our social responsibility. Air Canada believes positive labour relations will be achieved through constructive relationships with employees and their representatives. Constructive relationships are based on open communication and trust between the parties and can only be achieved if employees and their representatives are treated fairly, with respect and dignity.

In support of the objective to achieve and maintain positive labour relations, Air Canada is committed to the following fundamental principles.

- The unions, who are the certified bargaining agents of Air Canada employees, have legal status and are the legitimate representatives of the unionized staff. They must be recognized as such throughout the organization at all managerial levels and treated with courtesy and respect.

- The Collective Agreement establishes the framework for the union-management relationship and governs the conduct of the work place. This Agreement negotiated between Air Canada (Labour Relations and line management) and its Unions, is binding on both parties and must be recognized as such by all levels of management.

- Line management administer the Collective Agreement (work manual) on a day-to-day basis with the assistance of Labour Relations. To this extent, they will be trained in the application of the Collective Agreement and will have access to expert consultation, as required. Line Management will also be informed regarding strategies and plans which could impact the application fo the Collective Agreement

- Difference which arises in any relationship will be resolved through the Grievance Procedure promptly and in a serious professional manner. Line Managers will be accountable for prompt grievance resolution, in consultation with the Labour Relations department. Labour Relations will provide technical advice, but line mangers will make decisions.

- In addition to collective bargaining and grievance resolution, a constructive union-management relationship involves commitment to pursuing shared goals and ongoing consultation. Sound decisions by union leaders, which are likely to be in the best interest of their members and the Company, are best achieved through a well-informed union. Therefore, Labour Relations will be involved in the formulation of corporate strategies and plans affecting employees prior to final determination. Labour Relations will also ensure that the unions are informed of strategies and plans on a timely basis and will be responsible for an effective consultation process providing union leaders with a forum for input to Corporate strategies and plans.

[40] I think this document is evidence of the type of common personnel and wage policy to which section 10 of the Guidelines refers. It demonstrates that Air Canada treated all of its employees groups, including the ones at issue in this appeal, as being part of a single, integrated business with a common objective. Air Canada did not bring to the attention of the Court evidence to the contrary. Indeed, its position was largely based on comparing the details of collective agreements.

[41] I am of the respectful opinion that the Tribunal erred by considering the details of these collective agreements and not being guided by the above document in the making of its decision. Had it been, it would have found that the employee groups sought to be compared were subject to a common personnel and wage policy and therefore were employed in the same establishment.

5. Other Arguments Advanced by Air Canada

[42] Air Canada made a number of other arguments which I initially found compelling. However, on reflection I have not been persuaded by them.

[43] Air Canada argued that the disparate nature of the jobs in question is a factor to consider in determining whether the employee groups in question are subject to a common personnel and wage policy. Its point is that in comparing jobs of great dissimilarity, comparisons become unreliable. It says that section 10 of the EWG, 1986 was intended to promote reliable comparisons and therefore limit highly subjective comparisons of different types of work.

[44] I do not say that comparing vastly different jobs will not be difficult and require the application of potentially controversial subjective judgment. However, the question of whether such comparisons yield a sufficiently reliable result is one for determination by the Tribunal conducting the inquiry. It is premature to raise that issue in determining whether employees are in the same establishment of the employer.

[45] Air Canada says different bargaining units may have different priorities. Only when such priorities are the same could there be a common personnel and wage policy. Again, I think this argument is premature. Different priorities will be manifested in wages and benefits and will be taken into account at the substantive phase of the analysis. The substantive analysis will determine what, if any, bearing these different priorities may have on the issue of whether flight attendants have been subjected to gender discrimination.

[46] Air Canada submitted that the relative strengths of different bargaining units may explain wage differences between different employee groups. Section 11 of the Act and the Guidelines set out the factors which the Tribunal is to use in determining whether employees receive equal wages and perform work of equal value. To the degree that the evidence of differing bargaining strength is evidence pertaining to these factors, it is relevant and will be considered by the Tribunal at the substantive phase of the analysis. Therefore, it is premature to consider evidence of the employee groups' relative bargaining strengths at this point.

CONCLUSION

[47] For these reasons, applying the correct legal test to the relevant evidence, I conclude that the employee groups sought to be compared in this case consist of employees employed in the same establishment.

[48] I would allow the appeal with costs here and in the Court below, set aside the decision of the Trial Division and substitute the decision that the Trial Division should have given. The decision of the Tribunal should be quashed and the matter should be remitted to the Tribunal for redetermination on the basis that the employees in the employee groups sought to be compared are employed in the same establishment.

"Marshall Rothstein"

J.A.

"I agree

M. Nadon J.A."

EVANS J.A. (concurring reasons)

A. INTRODUCTION

[49] I have had the benefit of reading the reasons of Rothstein J.A. and I agree with his disposition of the appeal. The Tribunal's decision must be set aside for error of law. The terms of collective agreements that apply to complainants and other employees with whom they wish to be compared for pay equity purposes are irrelevant to determining whether the complainants and the comparators are employed in the same establishment within the meaning of section 11 of the Canadian Human Rights Act, R.S.C. 1985, c. H-6 and section 10 of the Equal Wage Guidelines, 1986, SOR/86-1082.

[50] I have written concurring reasons in order to reaffirm the proper approach to legal issues concerning human rights. In my opinion, the Tribunal and the Applications Judge fell into error because they tackled the interpretive problem facing them without adequate regard to its human rights context or to the interpretive approach to human rights legislation prescribed by the Supreme Court of Canada. Instead, they appear to have reached their conclusion largely on the basis of the "ordinary and grammatical" meaning of section 10, which they found to be ambiguous, without first considering the purpose of section 11 of the Canadian Human Rights Act, which the Guidelines are intended to make more concrete.

[51] Any analysis of a statutory human rights issue must be undertaken with a view to the purposes of the legislative scheme and of the policy objectives of the particular provisions in dispute. A search for the meaning of human rights legislation, including subordinate legislation, must both start with, and be informed throughout by, its essential objective. As McIntyre J. said in Ontario Human Rights Commission v. Simpsons-Sears Ltd., [1985] 2 S.C.R. 536 at 546:

It will be seen that the problem confronting the Court involves consideration of unintentional discrimination on the part of the employer and as well the concept of adverse effect discrimination. To begin with we must consider the nature and purpose of human rights legislation. [emphasis added]

This point was also made in the dissenting judgment of L'Heureux-Dubé J. in Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321 at 358: The starting point for any analysis of human rights legislation is the recognition that the purpose of such legislation is the protection of fundamental human rights.

[52] The more particular purpose underlying section 11 is the promotion of pay equity: that is, the elimination of the wage gap between men and women performing work of equal value resulting from the historic and systemic undervaluation of women's work and the segregation of the labour market by gender. See further, Nan Weiner and Morley Gunderson, Pay Equity: Issues, Options and Experiences (Toronto: Butterworths, 1990), chap. 2.

[53] Accordingly, a contextual examination of the problem with which the pay equity provisions were enacted to deal is very relevant to understanding the Tribunal's mandate in administering the legislation. Thus, in Public Service Alliance of Canada v. Canada (Department of National Defence), [1996] 3 F.C. 789, at para. 16 (C.A.), this Court discussed the nature of systemic discrimination early in its reasons in order to provide an essential perspective on the legal issues that it had to decide.

[54] In addition, the Supreme Court of Canada has consistently said that human rights legislation must be interpreted in a broad and purposive manner so as to enhance the right to freedom from discrimination: for perhaps the classic articulation of this interpretive approach, see Canadian National Railway Co. v. Canada (Canadian Human Rights Commission), [1987] 1 S.C.R. 1114 at 1134 (per Dickson C.J.).

[55] None of this is to say, of course, that the Tribunal or the Court may disregard the clear language of the Act or any limitations imposed on the attainment of that objective by either Parliament, or the Commission in its capacity as subordinate legislator: Gould v. Yukon Order of Pioneers, [1996] 1 S.C.R. 571 at para. 5. Hence, it is not permissible to read out of the Act, or redefine, the provision limiting the pay equity principle to employees of an employer who are "employed in the same establishment", as that phrase is now defined in section 10 of the Guidelines.

[56] Nonetheless, when, as here, the meaning of legislation is anything but clear, the Tribunal must draw upon its understanding of the legislative objective, and of the nature of the problem at which it is directed, in order to arrive at an interpretation of the Act and the Guidelines that best implements the underlying statutory aim, namely, the elimination of gender-based wage differentials between men and women performing work of equal value. The definition of "the same establishment" must be interpreted, therefore, in a manner that is responsive to the legislative purpose in confining the pay equity principle to employees of the same employer who are "subject to a common personnel and wage policy".

[57] The interpretive dilemma presented by this case arises from the poor drafting of section 10, and from the fact that the primary function originally performed by "the same establishment" requirement (the protection of regional rates of pay) was later performed by another provision in the Guidelines.

[58] Neither of the possible interpretations of section 10 relied on by the parties comfortably fits every aspect of the legislative scheme. Thus, the Tribunal acknowledged in its reasons, and Air Canada agrees, that, in most cases, its interpretation will prevent the comparison of the value of work performed by members of different bargaining units. This would seriously impede the implementation of the broad legislative purpose underlying section 11: closing the wage gap resulting from systemic gender discrimination and the segregation of the labour market in employment settings subject to federal regulation.

[59] On the other hand, the interpretation favoured by both the Canadian Human Rights Commission and the union representing the flight attendants is also problematic. It is likely, in most cases, to result in employees of the same employer being found to be employed "in the same establishment", even though section 11 of the Act clearly contemplates that an employer may maintain more than one establishment.

[60] This kind of interpretive dilemma should be resolved, if the statutory language so permits, by the broad and purposive interpretation of human rights legislation. Relying on Bhinder v. Canadian National Railway Company, [1985] 2 S.C.R. 561 at 567, Ruth Sullivan has aptly said in Sullivan and Driedger on the Construction of Statutes, 4th ed. (Toronto: Butterworths, 2000) at 376:

Interpretive doubts should be resolved in such a way that the overall purpose of the legislation - the promotion and protection of rights - is fostered. Thus, exceptions and defences in human rights legislation are strictly construed.

See also Dickason v. University of Alberta, [1992] 2 S.C.R. 1103 at 1121 (per Cory J.).

[61] In the absence of compelling arguments to the contrary, the Tribunal's narrow interpretation of section 10 must be regarded as suspect because it imposes severe limits on the application of the principle of equal pay for work of equal of value in a unionized environment. In my view, the Tribunal's interpretation is not justified by the relevant statutory text, its underlying purpose, or its legislative history.

[62] Finally, I should emphasize what this case is not about. It is not about whether the work of flight attendants is of equal value to that performed by the designated comparator groups when measured by "the composite of the skill, effort and responsibility required in the performance of the work and the conditions under which the work is performed" (subsection 11(2) of the Act). Nor is the case about whether, if the work is of equal value, the "wages" (as defined by subsection 11(7) of the Act) paid to flight attendants, a female dominated employee group, are less than those paid to the male dominated comparators. These are the tough issues that lie at the heart of any pay equity inquiry, but they have not yet been reached in this claim.

[63] This is not to say that the seemingly technical issue of interpreting the Guidelines' definition of "the same establishment" is unimportant. Far from it. If the Tribunal's view prevails, the complaint is ended, which will have very significant consequences for the parties.

[64] On the one hand, Air Canada will avoid an expensive and time consuming pay equity comparison, not to mention significant potential liability if the claimants succeed. On the other, the flight attendants will be denied the opportunities of a determination of whether their work has been undervalued compared with that of aircraft maintenance mechanics (or, more formally, "technical service personnel") and pilots, and if it is, of obtaining redress.

[65] Because I have concluded that the Tribunal's interpretation of section 10 of the Guidelines is wrong and its decision should be set aside, I need express no view on whether the Tribunal also breached the duty of fairness when it refused to admit evidence of systemic and occupational segregation in the labour market tendered by the Commission in support of its interpretation of section 10.

[66] Nonetheless, a significant clue to the Tribunal's interpretive approach is apparent in the following statement in its reasons (Appellant's Memorandum of Fact and Law, Appendix A, at 47):

it was beyond the mandate of this Tribunal to examine systemic discrimination against women in occupationally segregated workplaces under the [Act] in general and from that examination proceed to redefine the concept of establishment under section 11 of the [Act] which would counter such systemic discrimination. [emphasis added]

B. COMMON GROUND

[67] The factual background to this litigation is accurately described in the reasons of Rothstein J.A. and I need not need repeat it. Nor is it useful for me to walk the reader through the reasons of either the Tribunal or the Applications Judge, who largely agreed with the Tribunal. However, I shall highlight aspects of the Tribunal's reasoning in the course of these reasons.

[68] I agree with my colleague that the central issue in this case is one of statutory interpretation and that if the Tribunal's interpretation is wrong, its decision must be set aside for error of law. I also agree that the word "include" in section 10 of the Guidelines does not contemplate that employees who are not subject to "a common personnel and wage policy" may nonetheless be employed "in the same establishment".

[69] I should mention one other preliminary point. The Tribunal's reasons discuss whether the Commission's power to issue guidelines binding on both itself and the Tribunal under subsections 27(2) and (3) is consistent with its institutional independence. After a lengthy analysis, the Tribunal concluded (reasons at 53) that its independence was not compromised and that, while it was obliged to consider any guidelines issued under subsection 27(2), they did "not fetter [the Tribunal's] quasi-judicial decision-making powers."

[70] In Bell Canada v. Canadian Telephone Employees Association, [2003] 1 S.C.R. 884, 2003 SCC 36">2003 SCC 36, a decision released after this appeal was heard, the Supreme Court of Canada held that the Commission's statutory power to issue guidelines does not infringe the institutional independence of the Tribunal guaranteed by paragraph 2(e) of the Canadian Bill of Rights. However, it also held that, provided they are otherwise lawful, statutory guidelines are as legally binding on the Tribunal as regulations.

[71] Even though the Tribunal in the case before us incorrectly held that the Tribunal was free not to apply the guidelines if it so chose, its error is immaterial to the disposition of this appeal, which was argued on the bases that the Tribunal is independent and that section 10 of the Guidelines is valid and binding on the Tribunal.

C. ANALYSIS

[72] I have already identified the human rights policy that drives the interpretation of section 11 of the Act and section 10 of the Guidelines. This appeal turns on the interpretation of two phrases in section 10: "subject to a common personnel and wage policy" and "notwithstanding any collective agreement applicable to any employees of the establishment". First, though, it will be convenient to set out the relevant parts of section 10 of the Equal Wage Guidelines, 1986.

(i) "subject to a common personnel and wage policy"

(a) Tribunal's interpretation

[73] The words "common personnel and wage policy" are conceded to be vague: they have no established meaning in the vocabulary of labour relations. The Tribunal's understanding of the phrase must be inferred from its reasons. Thus, it stated (Tribunal Decision at 25):

... most modern workplaces do not have a single set of wage and personnel policies. Rather, there are many policies which deal with wages and personnel matters, many of which, if not most, are found in collective agreements in unionized workplaces. Therefore section 10 provides the interpreter with a logical conundrum. In a unionized workplace, most, if not all, of the wage and personnel policies are likely to be found in collective agreements. In most cases, the remaining wage and personnel policies established under retained management rights in unionized places will be unlikely to amount, in and of themselves, to "a common wage and personnel policy" across bargaining units.

[74] The Tribunal went on to say (Tribunal Decision at 26) that employment policies formulated under retained management rights in unionized environments would include

... anti-discrimination and sexual harassment policies, employment equity policies, employee assistance policies and general policies on employee benefits which are implemented in detail in collective agreements. In addition, there could be written or unwritten management strategies on wage negotiations and other issues to be dealt with in the collective bargaining process. ...

[75] I understand the Tribunal to be saying in these passages that the content of the "personnel and wage policy" of an employer of unionized employees is, for the most part, to be found in the collective agreements applicable to them, because these agreements will generally contain all, or nearly all, the terms and conditions of employment.

[76] On this interpretation, there will normally be little scope for looking to general corporate policies in order to determine an employer's "personnel and wage policy". For one thing, as Air Canada noted in its memorandum of fact and law (at para. 105),

collective agreements are legally binding on employers, unions and employees covered by them, and prevail over any company policy that is inconsistent with them.

In addition, the Tribunal was of the view (Tribunal Decision at 25) that any general policies established in unionized workplaces under retained management rights "will be unlikely to amount, in and of themselves, to 'a common wage and personnel policy.'"

[77] Hence, according to the Tribunal, in a unionized workplace one examines the terms and conditions of employment of the complainant group of employees and of any chosen comparator groups, most of which will be found in the applicable collective agreements. The Tribunal is not very explicit about the basis of the comparison. However, its view seems to have been that employees covered by different collective agreements would only be subject to "a common personnel and wage policy" and therefore employed "in the same establishment", if their terms and conditions of employment, including any applicable corporate policy, were the same or, perhaps, very similar.

[78] If employees in different bargaining units are only subject to "a common personnel and wage policy" when their collective agreements are identical, section 11 of the Guidelines will preclude cross-bargaining unit comparisons. If the test is less strict than "the same", it will likely limit the opportunities for comparisons outside complainants' bargaining unit, and be vague and difficult to apply in practice.

[79] Without knowing the degree of similarity required before employees in different bargaining units are subject to "a common personnel and wage policy", one cannot readily predict to what extent the Tribunal's interpretation of section 11 is likely to preclude cross-bargaining unit comparisons. However, Air Canada is of the view that, on the basis of the Tribunal's interpretation, it will rarely be possible to make such comparisons. In its memorandum of fact and law (para. 107), Air Canada states:

The actual collective agreements negotiated between an employer and a union will reflect both sides' bargaining priorities, orientations and strengths. An employer faced with different unions representing different bargaining units is naturally likely to have different wage and personnel policies embodied in the different collective agreements negotiated between it and these unions.

[80] Thus, there would presumably be no "common personnel and wage policy" if, for example, members of one bargaining unit agreed to be paid weekly on the basis of an hourly rate with few non-cash benefits, while another group of employees bargained for the payment of a monthly salary that covered a range according to years of service with the employer, as well as for a number of "personal days" off work and flexible hours. If these factors are sufficient to demonstrate that the employees concerned are not subject to a common wage policy, there will probably be no "common personnel and wage policy", regardless of the existence of corporate employment policies of general application.

[81] If, in a unionized environment, "a common personnel and wage policy" is reduced largely to the terms of collective agreements, it will very likely preclude comparisons between the value of the work and wages of employees in "blue collar" and "white collar" bargaining units. Such a restriction strikes at the heart of the pay equity principle because women often perform "white collar work", while most "blue collar" work is performed by men. Bargaining units can reflect patterns of occupational segregation. Given the statutory objective of eliminating gender-based differences in wages paid by an employer to men and women performing work of equal value, the Tribunal's interpretation of the legislation is implausible because it will do very little, if anything, to further this objective.

[82] Air Canada advanced three arguments to support the Tribunal's interpretation. Each argument seeks to show that the search for "a common personnel and wage policy" in the terms of collective agreements, and in any applicable corporate policies, narrows the definition of "establishment" in order to prevent comparisons in circumstances where the existence of wage differences between men and women performing work of equal value is unlikely to be attributable to be gender.

[83] First, bargaining strength may well be the non gender-related factor that explains wage differences between flight attendants on the one hand, and pilots and maintenance mechanics on the other. The fallacy of this argument is its assumption that differences in bargaining power, and hence in the wages paid to men and women performing work of equal value, have not been gender-related. In fact, the labour market has historically been highly gendered. It has been segregated by gender in that some jobs have overwhelmingly been performed by men, while others have typically been performed by women. "Women's work" has been systemically undervalued. An important goal of pay equity legislation is to remedy the discriminatory effects of the operation of a gendered labour market.

[84] It is worth noting here that the work performed by flight attendants, not all of whom, of course, are female, is very much "women's work". It involves caring for passengers by serving them food and drinks, as well as, more generally, ensuring their comfort and safety. In contrast, maintaining and servicing the mechanical aspects of an aircraft, and navigating, flying and being "in charge" of an aircraft, are quintessential "men's work".

[85] Second, members of some male dominated bargaining units are often interested in different items than members of female dominated bargaining units. For example, it was said, male dominated bargaining units may be more interested in obtaining the highest possible rate for the job than other benefits, such as longer paid holidays, flexible hours, and "personal days" off work. Whereas, it was argued, women may be more interested in non-monetary "life-style" benefits because they often bear primary responsibility for their families.

[86] Thus, counsel submitted, the Tribunal's interpretation of section 10 supports the right to free collective bargaining, a fundamental principle of labour relations, by requiring a close examination of the terms and conditions of employment for which employees have bargained.

[87] I do not agree with this argument either. As counsel for the Commission pointed out, when a pay equity claim has reached the point in the process where it must be determined if different wages are being paid to men and women performing work of equal value, the various kinds of benefit for which different groups have bargained are all likely to be included in calculating the "wages" paid to employees. Subsection 11(7) of the Act defines "wages" very broadly to include, not only specified benefits, but also "any other advantage received directly or indirectly from the individual's employer": paragraph 11(7)(e).

[88] Accordingly, there is no reason to think that differences in the "wages" of men and women performing work of equal value in the same business can be explained by the fact that men and women are interested in different forms of compensation for their labour.

[89] Third, the task of evaluating work is difficult and subjective, and the difficulty increases with the degree of difference in the nature of the work performed. Thus, it is argued, the Guidelines define "employed in the same establishment" relatively narrowly in order to avoid having to make inevitably very subjective comparisons of the relative value of totally different types of work.

[90] I do not agree. I do not doubt that the evaluation of work is more an art than a science, and often involves a degree of negotiation between employer and employees, frequently assisted by independent pay equity consultants who are retained to provide expert advice in the settlement of claims. Nonetheless, the exercise is far from being purely subjective: the criteria for determining the value of work are set out in section 11 of the Act and elaborated by the Guidelines.

[91] Nor is there any obvious correlation between differences in the terms and conditions of employment on the one hand, and the difficulties of comparing the value of the work being performed on the other. In advancing this argument, Air Canada seems close to urging the revival of the previous statutory standard: equal pay for equal work.

(b) Commission's interpretation

[92] The Commission has a very different view of the meaning of section 10 of the Guidelines. It says that "in the same establishment" refers not to the particular terms of employment, but to the location of responsibility within a corporate structure for determining pay and other employment policies. Thus, employees of the same employer will normally be subject to "a common personnel and wage policy" when they are employed in the same business entity.

[93] Since flight attendants, pilots and maintenance mechanics work in the core business of Air Canada, namely, the provision of air transportation, they are presumptively employed "in the same establishment" and the value of their work can be compared for pay equity purposes. Personnel and compensation issues for the three groups of employees relevant to this case are under the direction of the central human resources division of Air Canada, headed by the Vice-President, Human Resources. As Rothstein J.A. points out, some general corporate human resources policies (called by Air Canada "corporate general personnel policy manuals") also apply to, among others, the groups of employees under consideration here.

[94] In addition, while different Air Canada management teams bargain with different employee groups, a single committee within the corporation is responsible for steering or coordinating the negotiation process. Prior to and during collective bargaining, the steering committee approves a "monetary envelope" for each of the bargaining groups and the broad strategy to be followed by those negotiating on behalf of Air Canada with the various unions.

[95] If, as the Commission contends, the phrase "subject to a common personnel and wage policy" has to do with the location in the corporate structure of responsibility for setting employment policy, it is simply irrelevant whether the terms of collective agreements are sufficiently similar that the employees to whom they apply can be said to be "subject to a common personnel and wage policy".

[96] The Tribunal agreed that the Commission's interpretation would advance the principle of equal pay for work of equal value by enhancing complainants' opportunities to compare the value of their work with that performed by employees in other bargaining units. However, the Tribunal rejected this interpretation because it would almost always result in equating "establishment" and "employer", and would thereby virtually eliminate the statutory requirement that complainants can only request a comparison with co-employees "in the same establishment".

[97] Nonetheless, as the Tribunal recognized, the Commission's interpretation does not entirely eliminate the "same establishment" requirement because employees of a single employer would not be subject to a common personnel and wage policy if they were employed in different businesses operated by the same employer. For instance, Canadian Pacific used to operate not only an airline, but also a railway, a chain of hotels and a steamship line.

[98] Such diverse businesses may operate in very different economic and business environments, which may account for differences in pay for work of equal value performed by men and women. Hence, since these differences may well not be the result of systemic discrimination against women, it would be inappropriate to make pay equity comparisons across businesses. There may be other exceptional situations in which responsibility for setting compensation and employment policies does not rest with the employer.

[99] Further, it is not a fatal objection to the interpretation of section 10 advanced by the Commission that, in most cases, it is likely to lead to the conclusion that the employer is the establishment. There is nothing in either the statutory scheme, or the record before the Tribunal, to indicate that such a result is contrary to the legislative intent. Indeed, an interpretation of section 10 that will normally result in a finding that employees of an employer are employed "in the same establishment" is more consistent with the general legislative intent underlying section 11 than an interpretation that will normally prevent employees in a female dominated bargaining unit from comparing the value of their work and their wages with those of employees in a male dominated bargaining unit.

[100] In my view, the Commission's interpretation of section 10 is a linguistically possible reading of a badly drafted and obscure text. It fits the definition of "establishment" at least as well as the Tribunal's, which equates, for most practical purposes, being "subject to a common personnel and wage policy" with having "the same (or very similar) terms and conditions of employment".

[101] The Commission's interpretation also has two great merits. First, it advances the statutory goal of eliminating gender-based differences in wages paid by an employer to men and women performing work of equal value, without compromising any competing and clearly articulated interest. In contrast, the Tribunal's interpretation will impede the attainment of the underlying statutory objective. Second, the Commission's interpretation is easy to administer, whereas the Tribunal's is apt to be difficult to apply and contentious.

[102] It is not seriously disputed that Air Canada operates an integrated business and that, subject to its ability to negotiate agreements with the unions representing its employees, it is responsible for setting wages and employment policy for the employees in question. Accordingly, I do not attach as much significance as my colleague, Rothstein J.A., to the anodyne document, "Air Canada's Labour Relations Policy and Principles".

(ii) "notwithstanding any collective agreement applicable to any member of the establishment"

[103] The Tribunal held that this phrase did not preclude it from considering the terms of the collective agreements when determining if the complainants and the comparator groups were employed in "the same establishment". The Tribunal's interpretation of the words, "subject to a common personnel and wages policy", required it to determine if the complainants and members of the comparator groups were employed on essentially the same terms and conditions and were subject to the same or similar corporate policies respecting their employment.

[104] Air Canada used the "notwithstanding" phrase to advance two arguments in support of the Tribunal's conclusion: a textual argument, and an argument based on the legislative history of section 10 in general and of the "notwithstanding" phrase in particular.

(a) textual argument

[105] Counsel for Air Canada adopted the Tribunal's view that, if section 10 of the Guidelines was intended to ensure that general corporate policies respecting employment override the terms of a collective agreement, it would have said, "notwithstanding any collective agreement applicable to any employees of the establishment to the contrary".

[106] This argument assumes that the existence of "a common personnel and wage policy" is to be inferred from the terms and conditions of employment. But, as I have attempted to demonstrate, the words, "subject to a common personnel and wage policy", are normally better interpreted as referring to persons employed in the same business enterprise. Hence, the function of the "notwithstanding" phrase in section 10 is simply to make it clear that all employees subject to "a common personnel and wage policy" (because they are employed in the same business) are employed in "the same establishment", whether or not a collective agreement applies to any of them.

[107] This is to say that, contrary to the view advocated by some employers prior to the adoption of the final version of the 1986 Guidelines, section 10 provides that the existence of a collective agreement does not create a separate personnel and wage policy. Consequently, since the terms of a collective agreement are normally not relevant to whether the employees to which it applies are subject to "a common personnel and wage policy", it would have made no sense to add to the "notwithstanding" phrase the words, "to the contrary".

(b) legislative history

[108] Air Canada says that the legislative history of section 10 of the Guidelines supports the definition of "the same establishment" that is implicit in the Tribunal's interpretation of " a common personnel and wage policy". In particular, counsel focuses on the change that the Commission made between the penultimate and final versions of section 10 of the Guidelines. The argument is that the text of the penultimate version clearly means what the Commission now says that the final version means. Hence, the changes made to the final version of the Guidelines must have been designed to accommodate concerns expressed by some employers about the penultimate draft.

[109] As a result, counsel for Air Canada argues, the final version represents a compromise between two extremes. On the one hand, some employers wanted to preclude altogether any pay equity comparisons across bargaining units. Trade unions, on the other hand, wanted to eliminate, or to reduce to the minimum, the limitations on permissible comparisons imposed by the requirement that complainants and comparator groups must be "employed in the same establishment". In particular, they wanted to ensure that the phrase did not impede complainants' right to compare the value of their work with that performed by members of other bargaining units.

[110] Thus, it is said, in order to determine whether the employees in question are "subject to a common personnel and wage policy", the Guidelines permit cross-bargaining unit comparisons of the personnel and wage policies contained in collective agreements, as well as any applicable corporate employment policies. However, if the terms of employment of members of the bargaining units are not the same, or very similar, the employees concerned are not "subject to a common personnel and wage policy". Consequently, they are not employed "in the same establishment", and the value of their work, and the amount of their wages, cannot be compared for pay equity purposes.

[111] In order properly to assess this argument, it is necessary to start earlier in the legislative history than the penultimate draft of what became section 10 of the 1986 Guidelines.

"Establishment" in section 11 of the Act

[112] The first pay equity guidelines issued by the Commission in 1978 (Equal Wages Guidelines, 1978, SI/78-155) did not define the statutory phrase "employed in the same establishment". The word "establishment" apparently was borrowed from the Canada Labour Code, which speaks of an "industrial establishment", and was inserted in section 11

to take account of regional differences which may result in the payment of different wages by the same employer in different parts of the country.

(Canada, House of Commons, Standing Committee of Justice and Legal Affairs, "Minutes of Proceedings and Evidence of the Standing Committee of Justice and Legal Affairs" in Debates, No. 11 (17 May, 1977) at 11:37-38 (Statement by the Hon. Ron Basford, Minister of Justice and Attorney General of Canada))

The rationale was that differences in wages paid to male and female employees performing work of equal value in different parts of the country might well be attributable to regional differences in the cost of living and in the level of unemployment, rather than to systemic gender discrimination.

[113] In the Report of the Commission on Equality in Employment (Ottawa: Supply and Services Canada, 1984), Commissioner (now Justice) Abella recommended that section 11 of the Act be amended by eliminating the requirement that pay equity complainants and male comparators must be employed in the same establishment: Recommendation 35. The Report stated that this requirement "is a potential barrier to the comprehensive enforcement of the federal equal pay law" (at 243) by unduly restricting comparisons between occupational groups.

[114] This recommendation was not implemented. However, in March 1985, the Canadian Human Rights Commission issued background notes to its proposed amendments to the 1978 Guidelines, stating (Appeal Book, Volume I at 169) that the "functional approach" that it intended to take to the definition of "the same establishment"

goes far towards resolving the difficulties that prompted Judge Abella to recommend that reference to establishment be deleted from Section 11.

March 1985 draft

[115] For the purposes of this appeal, the most important change proposed to the 1978 Guidelines was to define "in the same establishment" in "functional", rather than in physical or geographic terms. Previously, the Commission had defined "establishment" in terms of the physical premises or locations where employees worked: Equal Pay for Work of Equal Value / Interpretation Guide for Section 11 of the Canadian Human Rights Act (Ottawa: Canadian Human Rights Commission, 1984) at 3. In the background notes to the proposed guidelines of March 1985, which were circulated to interested persons for comment, the Commission stated (Appeal Book, Volume I at 180):

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.

[116] The Commission explained (Appeal Book, Volume I at 169) that one rationale for this new approach was to deal with

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.

The intention was thus to expand the circumstances in which employees would be found to be employed "in the same establishment" so as to preclude the possibility that employees in the same bargaining unit could be in different "establishments".

[117] Predictably, the Commission received a range of responses to its draft. While most welcomed the proposed move to a "functional" definition of "establishment", the Deputy Minister of Labour Canada (Appeal Book, Volume III at 1612) and the Canadian Truckers Association were apprehensive that this shift might eliminate the exemption of regional wage differentials from pay equity comparisons "if the employer happens to have a central compensation regime, whatever that means" (Appeal Book, Volume X at 5736).

[118] Most respondents were also concerned that the proposed definition could preclude cross-bargaining unit pay equity comparisons. For example, the Deputy Minister of Labour Canada (Appeal Book, Volume III at 1612) predicted that the proposed wording might deprive white collar complainants of the right to be compared to blue collar co-employees because they are normally subject to different personnel and compensation policies. Similar concerns were expressed by the Canadian Labour Congress, the Public Service Alliance of Canada, and the Secretary of the Treasury Board. Only the Railway Association of Canada ("RAC") expressed satisfaction that the Commission's proposed definition of "establishment" precluded comparisons between groups of employees covered by different collective agreements.

[119] Interestingly, the Bank of Montreal welcomed the proposed definition of "the same establishment" because it would "formally recognize the functional disparities which exist in any large national organization which operates different businesses in different market

sectors ...". The Commission argued in this appeal that this is precisely the effect of the final version of section 10. That is, it precludes the comparison of the value of the work performed by men and women employed in different businesses operated by a single employer.

September 1985 draft

[120] In September 1985, the Commission published a redraft of the March version of the guideline, after consulting with interested persons. The September draft dealt specifically with the issue of regional rates by proposing to add differences in regional rates of pay to the list of "reasonable factors" that indicate a non-gender explanation of wage differentials between men and women performing work of equal value. This had not been done previously because the "same establishment" requirement was regarded as sufficient to exempt regional pay structures.

[121] The definition of "establishment" proposed in the September draft was as follows (Appeal Book, Volume III at 1621):

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 corporate policy which is controlled centrally even though their [sic] 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]

[122] In the accompanying explanatory memorandum sent to members of the Commission in September 1985, T. N. Ulch, Chief of the Equal Pay Section, said (Appeal Book, Volume III at 1614):

the 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 [during the consultation process] that the present wording could be interpreted in a sense that would limit an establishment to a single collective bargaining unit.

[123] The September draft provoked some strong reactions. Thus, in a letter dated November 12, 1985, the RAC expressed its disappointment that the Commission had ignored its comments on the March draft, saying (Appeal Book, Volume X at 5768):

It is absurd to suggest that a collective agreement is not considered to be a compensation policy. Clearly, each collective agreement is a separate compensation policy.

[124] A similar reaction came from another employers' association, the Federally Regulated Employers-Transport and Communication ("FETCO"), after a meeting with the Minister of Labour and the Deputy. In a letter to the Deputy Minister of Labour, FETCO reiterated its belief that every collective agreement constitutes a separate "personnel and compensation policy".

[125] However, FETCO added, it would be content if the Commission dropped from the proposed definition of establishment the second sentence, which expressly stated that a bargaining unit is not considered to be a corporate personnel and compensation policy. FETCO's letter concluded (Appeal Book, Volume X at 5777):

In that way, the question of the status of individual collective agreements becomes open to interpretation, thus allowing each of the parties involved in an "equal value" case ... to make their own arguments as to whether or not a collective agreement in a given instance is or is not a separate "personnel and compensation policy".

Air Canada argues that the final version of section 10 of the Guidelines was intended to bring about exactly this result and must be interpreted accordingly.

Conclusion

[126] There is no doubt that the definition of "the same establishment" in the final version of section 10 is not as clear as the draft to which the RAC and FETCO objected. It no longer says that, "for greater certainty" a bargaining unit is not a separate personnel and compensation policy. On the other hand, the Commission did not adopt FETCO's proposal to omit any reference to bargaining units.

[127] It is helpful to set out again the final version of section 10 of the 1986 Guidelines:

[128] Nothing in the record explains why the Commission changed the definition of establishment contained in the draft of September 1985. Nor, in my opinion, does the legislative history of the disputed provision point ineluctably to the conclusion that the final version of section 10 was intended to give effect to FETCO's representation. For the Commission to have agreed to this would have been an enormous retreat and would have meant rejecting all the other representations that had urged the Commission to make it clear that the definition of "establishment" did not impede equal pay complainants from comparing their work and wages to those of members of other bargaining units.

[129] Given the range of views expressed during the consultative process and the final text of section 10, I am not satisfied that the Commission intended to commit itself to the position urged by the RAC and FETCO. First, despite some refinements in the language, the central element of the definition of "establishment" is retained throughout the three drafts that were put before us: employees to whom the same personnel and compensation policy/policies apply/applies.

[130] Second, the point most frequently made in response to the draft of March 1985, which said nothing about bargaining units or collective agreements, was that the concept of a common personnel and compensation policy was unclear. In response, the September draft made it clear that collective agreements do not constitute personnel and compensation policies. In my view, the final version contains the same idea.

[131] The phrase, "notwithstanding any collective agreement applicable to any employees of the establishment", means that employees subject to a common personnel and wage policy are employed in the same establishment, even if a collective agreement applies to any of them. The French text uses the phrase, "indépendamment des conventions collectives". Since "indépendamment" can mean "without regard to", there is no material difference in the meaning of the English and French versions of section 10.

[132] Thus, the words, "notwithstanding any collective agreement applicable to any employees of the establishment", like those in the September draft, resolve the doubts raised by those concerned that the March draft might be interpreted as precluding or limiting cross-bargaining unit comparisons.

[133] In summary, I see nothing in the legislative history of section 10 to displace the operation of the principle that human rights legislation should be interpreted broadly and statutory exceptions and limits interpreted narrowly. Thus, section 10 of the Guidelines must be interpreted in a manner that, consistent with the statutory language, is best calculated to achieve pay equity, a principle of fundamental importance that Parliament has adopted to remedy workplace injustices flowing from systemic gender discrimination and segregation in the labour market.

[134] The fact that, in most cases, the Commission's interpretation of the legislation means that all the employees of an employer will be found to be in the same establishment is not a fatal objection. Indeed, in my view, a close examination of the background to the enactment of section 10 tends to support the view that it should be interpreted to mean that, whether or not a workplace is unionized, employees of a single employer will normally be in the same establishment.

D. CONCLUSIONS

[135] For these reasons, I agree with the disposition of the appeal proposed by Rothstein J.A..

"John M. Evans"

J.A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-481-01

STYLE OF CAUSE: CANADIAN HUMAN RIGHTS COMMISSION v. AIR CANADA and CANADIAN UNION OF PUBLIC EMPLOYEES (AIRLINE DIVISION)

PLACE OF HEARING: OTTAWA

DATE OF HEARING: MARCH 25 AND 26, 2003

REASONS FOR JUDGMENT : ROTHSTEIN J.A.

CONCURRED IN BY: NADON J.A.

CONCURRING REASONS BY: EVANS J.A.

DATED: MARCH 18, 2004

APPEARANCES:

Mr. Andrew Raven FOR THE APPELLANT

Mr. David Yazbeck

Mr. Salim Fakirani

Mr. Thomas Brady FOR THE RESPONDENT

Mr. Robert Grant AIR CANADA

Mr. Douglas Wray FOR THE RESPONDENT

CANADIAN UNION OF PUBLIC EMPLOYEES

SOLICITORS OF RECORD:

Raven, Allen, Cameron & Ballantyne FOR THE APPELLANT

Barristers & Solicitors

Ottawa, Ontario

Heenan Blaikie FOR THE RESPONDENT AIR CANADA

Barristers & Solicitors

Montreal, Quebec

Caley & Wray FOR THE RESPONDENT

Barristers & Solicitors CANADIAN UNION OF PUBLIC EMPLOYEES

Toronto, Ontario

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Canadian Human Rights Commission v. Air Canada, 2004 FCA 113

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