Public Service Alliance of Canada v. Her Majesty The Queen, 2001 FCT 890

Date: 20010814

Docket: T-1949-00

Neutral citation: 2001 FCT 890

BETWEEN:

                                    PUBLIC SERVICE ALLIANCE OF CANADA and

                                                             NYCOLE TURMEL

                                                                                                                                             Plaintiffs

                                                                         - and -

                              HER MAJESTY THE QUEEN IN RIGHT OF CANADA

                                                                                                                                           Defendant

                                                        REASONS FOR ORDER

ARONOVITCH, P.

Overview

[1]                The plaintiffs have brought this action on behalf of the female employees of seven "separate employers", alleging that, Her Majesty the Queen in Right of Canada, ("Her Majesty"), is engaged in sex-based wage discrimination in the remuneration of these women employees, contrary to s.15 of the Canadian Charter of Rights and Freedoms (the "Charter").

[2]                The plaintiff, Public Service Alliance of Canada ("PSAC") is an employee organization certified as bargaining agent for employees, in various bargaining units, across the federal public service, including those of the separate employers at issue in this proceeding. Nycole Turmel is the president of PSAC.

[3]                There are seven separate employers at issue, namely; the Office of the Auditor General of Canada ("OAG"); the Canadian Security Intelligence Service ("CSIS"); the Communications Security Establishment ("CSE"); the Social Sciences and Humanities Research Council ("SSRC"); the Office of the Superintendent of Financial Institutions ("OSFI"); the Statistics Survey Operations ("SSO"); and the Medical Research Council ("MRC").

[4]                The defendant has brought this motion pursuant to Rule 221(a) of the Federal Court Rules, 1998, (the "Rules"), for an order striking out the plaintiffs' statement of claim on the ground that it discloses no reasonable cause of action. The defendant argues, in particular, that the plaintiffs' claim is based on the identity of the employer, which is not an enumerated or analogous ground under s. 15 of the Charter. The defendant also argues that the plaintiffs should pursue their remedy as a complaint under the Canadian Human Rights Act, R.S.C. 1985, c. H-6, ("the CHRA"), rather than as an action before this Court.

The Plaintiffs' Claim

[5]                For the purposes of the defendant's motion to strike out the statement of claim as disclosing no reasonable cause of action, the plaintiffs' assertions of fact are to be taken as proven. These are set out below in some detail.

[6]                The claim commences by recounting the genesis of separate employers. Under the Public Service Staff Relations Act, R.S.C. 1985, c. P-35, (the "PSSRA"), all employees included in the public service are employed by the defendant, Her Majesty. In the case of those portions of the public service specified in Part I of Schedule I of the PSSRA, the representative of Her Majesty is the Treasury Board. In the case of those portions of the public service specified in Part II of Schedule I to the PSSRA, the representatives of Her Majesty are the separate employers listed thereon.

[7]                Separate employers are created either by their addition to Part II of Schedule I of the PSSRA, or by the transfer of a portion of the public service from Part I to Part II of Schedule I of the PSSRA. The claim states that the practical result of the designation is to allow the portion of the public service so designated, a degree of autonomy in exercising its authority as an employer. The claim goes on to allege, however, that the Treasury Board and the Governor-in-Council, in fact, exert significant control over the authority and actions of separate employers, particularly in respect of the employees of the separate employers.

[8]                Paragraph 7 and following of the claim set out the limits that have been placed on the authority of separate employers to negotiate terms and conditions of employment pertaining to their employees as follows:

7.    [...]

(a) pursuant to section 56 of the PSSRA, a separate employer can only enter into a collective agreement with the approval of the Governor-in-Council;

(b) pursuant to subsection 11(2) of the Financial Administration Act, R.S.C. 1985, c. F-11, as amended, the Treasury Board may exercise specific powers and functions in relation to personnel management in the public service subject to the provisions of any enactment respecting the powers and functions of a separate employer; and

(c) pursuant to subsection 12(2) of the Financial Administration Act, the Governor-in-Council may authorize the responsible minister, deputy or chief executive officer in respect of a separate employer to exercise and perform any of the powers and functions of the Governor-in-Council or the Treasury Board in relation to personnel management in that portion of the public service.

8. As a matter of practice, separate employers do not have the authority to implement independently changes in terms and conditions of employment of the employees which work in that portion of the public service, including the payment of wages and benefits to those employees. Rather, separate employers may only make those changes which are expressly authorized by the Treasury Board or the Governor-in-Council.

[9]                The Plaintiffs also state that the wage and benefits structures in place at separate employers have been purposefully established to be broadly consistent with those in place for employees of the Treasury Board. Treasury Board representatives are said to have historically exerted controls over these separate employers in order to ensure broad conformity with wage patterns established in the greater public service.

[10]            The claim goes on to explain how the Treasury Board wages, which would have served as the basis or model for remuneration at separate employers, were themselves impugned and found to be discriminatory contrary to s.11 of the CHRA. Pay-equity complaints lodged by PSAC in 1996 and 1990, with the Canadian Human Rights Commission, were referred to the Canadian Human Rights Tribunal ("the Tribunal"), which, on July 19, 1998, found Treasury Board in violation of s.ll of CHRA and ordered adjustments to be made to the remuneration of its female employees, retroactive to March 8, 1985.

[11]            The women employees of each of the separate employers, are said to perform duties which are essentially the same as those performed by employees of the Treasury Board, in the occupational groups encompassed in the equity complaint, but at wage rates inconsistent with those ordered by the Tribunal in 1998.

[12]            The plaintiffs say that, following the Tribunal order, several separate employers agreed that adjustments should be made to the salaries paid to their female employees in order to eliminate sex-based discrimination. These employers have sought the permission of Treasury Board to adjust their wage rates to be consistent with those ordered by the Tribunal.

[13]            The claim concludes that the remuneration paid to female employees of the separate employers continues to lag behind that of female employees in the broader public service, notwithstanding that the former perform essentially the same work as the Treasury Board employees. The plaintiffs assert that the lower wages paid to the affected employees are therefore discriminatory, contrary to the CHRA and s.15 of the Charter.

[14]            Flowing from the above, the plaintiffs seek the following relief; a declaration that Her Majesty's continuing failure to pay wages and benefits to female employees of separate employers, in a manner that is consistent with the Tribunal order, discriminates against these employees on the basis of sex, and constitutes a violation of s.15 of the Charter. The plaintiffs also seek orders directing the Treasury Board, or any other responsible party, to increase the wages of the affected employees in order to remedy the s. 15 violations and to do so retroactively.

Argument of the Crown

[15]            The Crown's essential ground for this motion to strike, is that the discrimination complained of, is based on employment rather than gender, and that as such, the plaintiffs have failed to assert a justiciable violation of s. 15 of the Charter.

[16]            First, says the defendant, the separate employers and the Treasury Board are independent employers. Since the 1998 Tribunal order only applies to the employees of the Treasury Board, the employees of the separate employers cannot benefit from the 1998 Tribunal order.

[17]            Here the defendant relies on the legislative separation between the Treasury Board and the separate employers. In abbreviated form, the following is the statutory scheme relied on by the Crown. It provides the basis for the distinctions we have already seen referenced in the claim.   

[18]            Subsection 11(1) of the Financial Administration Act, R.S.C. 1985, c. F-11 ("FAA"), defines "separate employer" to mean a "separate employer" as defined in the PSSRA. The PSSRA then provides that the Treasury Board is the employer for the portion of the public service defined in Part I of Schedule I of the PSSRA and the "separate employer" is the employer of the portion of the public service specified in Part II of Schedule I of the PSSRA.

[19]            The Crown points out that the Treasury Board's statutory authority over personnel management is circumscribed pursuant to its enabling legislation. Thus, pursuant to ss.11(2) of the FAA, the Treasury Board exercises its responsibilities in relation to personnel management and, employer and employee relations, in the public service.

"subject to the provisions of any enactment respecting the powers and functions of a separate employer".

[20]            By the same token, says the defendant, the separate employers have been granted powers of the Treasury Board over the management of their own personnel. The Crown places special emphasis on the fact that each of the Treasury Board and the separate employers, have separate statutory authority to enter into collective agreements with their respective employees. The Crown maintains that the provisions of the FAA and the PSSRA, read together, attest to Parliament's clear intention that the employers at issue subsist as legally distinct entities. According to the Crown, that view is supported by this Court's jurisprudence, (see Maclean et al v. Canada (Treasury Board) et al, [1994] 77 F.T.R. 292 and Gingras v. Canada, [1994] 2 F.C. 734). Indeed, the Federal Court of Appeal stated in Gingras at pages 753 and 763:

Parliament has chosen to indicate by legislation, rather than by regulation, the persons for whom the Treasury Board on behalf of Her Majesty will be the employer and those for whom it will not; any change of status to this regard, therefore, can only be made by legislation.

As CSIS is a "separate employer" and designated as such in Part II of Schedule I, it goes without saying that its employees do not have Her Majesty, represented by the Treasury Board, as their employer.

[21]            The defendant adds that the claim is founded on the 1998 Tribunal order which the plaintiffs are attempting to extend to a group of employees to whom it cannot apply. The findings of the CHRA are in respect of only Treasury Board employees. They are based on disparities and demographics present within the universe of Treasury Board employees. Section 11 of the CHRA provides that it is discriminatory for an employer to maintain a wage difference between male and female employees employed "in the same establishment". The Equal Wage Guidelines, 1986, SOR/86-1082, in turn, define "establishment" as "...all employees of the employer subject to a common personnel and wage policy ...". The defendant argues that the plaintiffs cannot take a finding, made on the basis of a set of demographics and data present in the context of Treasury Board employees, and apply these to employees, not employed by Treasury Board, and accordingly in a different "establishment" for the purposes of the assessment of pay inequity.

[22]            Turning to the plaintiffs' assertion of an infringement of the employees' Charter rights, the defendant argues that the plaintiffs do not have, and cannot assert a proper s.15 claim. The defendant argues that the plaintiffs are claiming that there is discrimination on the basis of sex but, in fact, by way of remedy, are seeking the benefit of an adjustment given to Treasury Board employees. The claim is made on the basis that female employees of separate employers are said to be doing essentially the same work as Treasury Board employees for lesser wages. The defendant urges, therefore, that the proper "comparator group" for the purposes of a s.15 analysis, is that of female employees of Treasury Board whose wages have been adjusted by virtue of the pay-equity order. According to the Crown the disparity complained of is a function of the employer. The distinction between the two groups is not based on sex, a personal characteristic, but relates to employment which is not a protected ground or right under ss.15(1) of the Charter. As differential treatment, based on employment, is not protected under the discrimination provision of the Charter, the plaintiffs' claim, says the defendant, is unfounded and cannot succeed. (see Delisle v. Canada (Deputy Attorney General), [1999] 2 S.C.R. 989 at 1024-1025; Canada (A.G.) v. Taylor (1991) 81 D.L.R. (4^th) 679 at 688 (F.C.A.); Canada (Attorney General) v. George, [1991] 1 F.C. 344 at 348 (F.C.A.)).

Analysis

[23]            It is common ground between the parties that in order to determine whether a statement of claim discloses no reasonable cause of action it must be "plain and obvious" that it cannot succeed. The threshold is a difficult one to meet. To begin, a statement of claim, read as a whole, must be broadly and generously construed. The Court is not to be deterred by the tenuousness or novelty of an argument. Nor is a claim to be extinguished, where the law is burgeoning or unsettled, as the failure of the claim must be evident beyond doubt.    It follows then, that a claim cannot be struck at a preliminary stage, if the allegations raise a serious question of law, proper for determination on its merits, or issues of mixed fact and law, where the disposition of the claim on the merits calls for an assessment and finding of fact. (see Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at 980; Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441 at 449-451; Vulcan Equipment Company Limited v. The Coats Company, Incorporated, [1982] 2 F.C. 77 at 78; VISX Inc. v. Nidek Co. (1998), 82 C.P.R. (3d) 289; Duplessis v. Canada, [2000] F.C.J. No. 1917 (T.D.)).

[24]            For the application of these principles, and in order to place the arguments of the parties in context, I begin with an overview of some of the elements entailed in an analysis of a s.15 discrimination claim under the [1977] 1 S.C.R. 497">Charter.    Law v. Canada (Minister of Employment and Immigration) [1977] 1 S.C.R. 497, a case both parties have reference to, sets out the determinations to be made at the various steps of the inquiry. I need not set out the full scheme of the analysis. For our purposes, a critical element is to establish the appropriate comparator person or group. This is essential because the equality guarantee is a comparative concept:

... a court must identify differential treatment as compared to one or more persons or groups, [supra, at p. 531]

Determining the appropriate comparator requires consideration of a number of "contextual factors". As stated by the Court at page 531:

To locate the proper comparator, we must consider a number of factors, including the subject-matter of the legislation ... Both the purpose and the effect of the legislation must be considered in determining the appropriate comparison group or groups. Other contextual factors may also be relevant. The biological, historical, and sociological similarities or dissimilarities may be relevant in establishing the relevant comparator in particular, and whether the legislation effects discrimination in a substantive sense or more generally.

[25]            Although the starting point is to consider the comparator person or group raised by the claimant, as we shall see below, it is open to courts to refine the comparison, where the claimant's characterization is insufficient. Locating the proper comparator "requires an examination of the subject-matter of the legislation and its effects, as well as a full appreciation of context" (at page 550).

[26]            A recent example of the application of the contextual approach to determine the proper comparator group, is in another recent decision of the Supreme Court of Canada in Granovsky v. Canada, [2000] 1 S.C.R. 703.    In that case, the appellant injured his back and applied for permanent disability pension under the Canada Pension Plan. The appellant's application was refused because he had failed to make the required CPP contributions. The appellant argued that he could not make the required CPP contributions because of his disability, and the failure to take this into account amounted to discrimination on the basis of disability contrary to ss.15(1) of the Charter. Given that the appellant was required to meet the level of contribution of an ordinary able-bodied person the appellant argued that the proper comparator group was an ordinary member of the work force who is able-bodied. The Supreme Court rejected this comparator group, holding instead that the proper comparator was the permanently disabled. In doing so, the Court stated the following at 729-731:

The identification of the group in relation to which the appellant can properly claim "unequal treatment" is crucial. The Court established at the outset of its equality jurisprudence in Andrews, supra, that claims of distinction and discrimination could only be evaluated "by comparison with the conditions of others in the social and political setting in which the question arises (p. 164).

[...]

. . . However, while a s.15 complainant is given considerable scope to identify the appropriate group for comparison, "the claimant's characterization of the comparison may not always be sufficient. It may be that the differential treatment is not between the groups identified by the claimant, but rather between other groups (Law, supra, at para. 58).

[27]            Once the appropriate comparator group has been established through a full appreciation of the context, the next step is to determine whether the impugned distinction is based on an enumerated or analogous ground.

[28]            I have already referred to the ample jurisprudence cited by the defendant to the effect that a distinction based on employment is not an enumerated or analogous ground for the purposes of s.15 of the Charter, (see Delisle, George and Taylor, supra). I need not review the jurisprudence in detail, as it is arguable, as suggested by the plaintiffs, that these cases may be distinguished on the basis that the groups at issue did not share a personal characteristic, such as sex, and that the distinction in those cases which created the disadvantage complained of, was based solely on the condition of their employment. In the case at bar, the employees claiming discrimination are all female employees. Indeed, this fact alone, is sufficient to undermine the argument that the distinction is evidently based on employment. It is not plain and obvious that the distinction is not, at least partly, based on sex.

[29]            I am mindful that the plaintiffs maintain that they intend to assert that wages paid to the affected employees are discriminatory because they are based on assumptions of systemic wage discrimination regarding the nature and value of female work. The Crown argues that such is not alleged in the claim, which merely alleges discrimination based on employment in an establishment which is not covered by the pay-equity award. The claim, the defendant points out, is made solely by reference to employees of different establishments, one coming within the 1998 Tribunal order and one not. What the plaintiffs are attempting to achieve is a pay-equity settlement without submitting their claim to the appropriate process in the appropriate forum.

[30]            There are a number of points to be made in response. I shall focus on the following which are determinative in the context of this motion. First, the separation and independence of the employer is an important element of the defendant's argument. The defendant, very ably, argues that the separation of the employers is evident by statute and according to the jurisprudence of the Court. The plaintiffs, in turn, very ably distinguish the jurisprudence and, as we have seen, rely in the body of their claim on some of the very statutory provisions which the defendant maintains go to establishing beyond doubt, the separation of the employers.

[31]            Let us recall that, for the purposes of this motion, I must accept as proven the facts pleaded in this connection. The plaintiffs assert that there is ultimately, only one employer of public service employees, namely, Her Majesty. They state that separate employers are curtailed in their authority to independently change the wages of their employees, and that the Treasury Board and Governor-in-Council exert over-arching control and influence in the area. It cannot be maintained, in the circumstances, that the separation and independence of the employers is plain and obvious. Indeed, the nature of the relationship between the Treasury Board and separate employers, the degree of influence or control, the modelling of wages, if any, require discovery and determinations of fact. Moreover, the identity of the true or ultimate employer, for these purposes, raises a serious question of law which is of general importance, and defies determination, in summary fashion, in the context of a motion to strike.

[32]            The defendant's next challenge, is that gender based wage discrimination is a burgeoning and unsettled area of the law, as is the scope rights, and particularly the equality rights protected under the Charter. This is unlikely territory, for a preliminary finding that is beyond doubt.

[33]            Moreover, to the extent that the identity of the comparator group is pertinent to a finding of discrimination, the jurisprudence teaches that it cannot be presumed, but demands evidence and an appreciation of the factual context in which the disparity complained of arises. Again, it is a determination properly reserved to the trier of fact.

[34]            Beyond these issues, and taking the claim as a whole, I am unable to conclude that it must fail for want of a proper claim under s.15 of the Charter. First, the claim is primarily in respect of violation of the Charter and explicitly alleges discrimination based on sex. I take the plaintiffs' point that they are not suing on the Tribunal order. The pay-equity order is said to be a fact which serves to demonstrate and support the essential allegation of the claim, that the affected employees are the objects of wage rate discrimination based on their gender. It may be sufficient for that purpose that plaintiffs show, as they allege, that there is a modelling of wages and classifications such that, the women employees of the separate employers, are discriminated against by being remunerated on the basis of wages that have already been found to be discriminatory, based on sex.

[35]            The plaintiffs are not thereby precluded from adducing evidence of practices or assumptions of systemic discrimination underlying, either the former Treasury Board wages, or the present day wages of the female employees of the separate employers. This, however, is an evidentiary matter and not one going to the sufficiency of the facts pleaded to found a cause of action.

Claim not properly before the Court

[36]            The defendant's second argument in support of its motion to strike is that this Court should not hear Charter claims where there is recourse under human rights legislation.    The defendant argues that s.11 of the CHRA is aimed at correcting wage discrimination, and that the Canadian Human Rights Tribunal is best poised to deal with such discrimination. The defendant relies on Moore v. British Columbia (1988) 50 D.L.R. (4^th) 29 (B.C.C.A.), for the principle that courts should decline to hear Charter claims based on a violation of human rights legislation. At the hearing of the motion, the defendant recognized that Moore was overtaken in Perera v. Canada, [1997] F.C.J. No. 199 (T.D.), [1998] 3 F.C. 381 (C.A.), but urged that this Court should nonetheless exercise its discretion to require the plaintiffs to pursue a remedy under the CHRA rather than before this Court.

[37]            Indeed, Moore was specifically rejected in Perera, supra. The Federal Court of Appeal approved of Justice Cullen's conclusion (at pages 17 and 18) that "Moore is simply bad law in this day and age" and there "is nothing in federal human rights legislation that precludes a separate Charter action."

[38]            I turn now to consider whether this Court has some discretion to require the plaintiffs to pursue a remedy under the CHRA, and if so, whether that discretion should be exercised. Clearly, there is nothing in the CHRA to oust the supremacy of the Charter. Further, the remedies that a court of competent jurisdiction may award pursuant to s.24(1) of the Charter, differ from the remedies which may be awarded under the CHRA. As the Federal Court Trial Division held in Perera at para. 19:

The broad remedial power enshrined in section 24 of the Charter allows for a broader remedy than that provided in the Canadian Human Rights Act.

The Crown has not shown that there is any jurisdiction in this Court to require that a plaintiff pursue his or her constitutional rights in a particular forum. Even if there were such a discretion, on a motion to strike a statement of claim, such discretion would clearly be exercised in favour of the plaintiffs.

Conclusion

[39]            For the foregoing reasons, I shall dismiss the defendant's motion with the costs of the motion going to the plaintiffs.

[40]            The plaintiffs ask for costs on a solicitor-and-client scale on the ground that this motion is untenable. While I find no basis in the circumstances of this case to justify such an award, I reiterate the point already made. A motion to strike for want of a reasonable cause of action is an unlikely vehicle in cases which comprise substantive Charter claims that raise issues of general importance, and call for a contextual approach in the assessment of fact.

[41]            I thank both counsel for their thoughtful and complete submissions.

Signed at Ottawa,

August 14, 2001.                                                                                  "R. Aronovitch"           

Prothonotary

                           FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD

COURT FILE NO.:                       T-1949-00

STYLE OF CAUSE:                     PUBLIC SERVICE ALLIANCE OF CANADA AND NYCOLE TURMEL v.    HER MAJESTY THE QUEEN

PLACE OF HEARING:                OTTAWA, ONTARIO

DATE OF HEARING:                  MAY 23, 2001

REASONS FOR ORDER OF THE HONOURABLE MADAM ROZA ARONOVITCH,     PROTHONOTARY

DATED:                                        AUGUST 14, 2001

APPEARANCES:

MR. ANDREW RAVENFOR PLAINTIFF

MS. ANNE M. TURNELYFOR RESPONDENT

SOLICITORS OF RECORD:

RAVEN, ALLEN, CAMERON & BALLANTYNEFOR PLAINTIFF

OTTAWA, ONTARIO

MR. MORRIS ROSENBERGFOR RESPONDENT

DEPUTY ATTORNEY GENERAL OF CANADA

OTTAWA, ONTARIO

Date: 20010814

Docket: T-1949-00

Ottawa, Ontario, this 14^th August, 2001.

PRESENT:                                  MADAM PROTHONOTARY ARONOVITCH

BETWEEN:

PUBLIC SERVICE ALLIANCE OF CANADA

and NYCOLE TURMEL

Plaintiffs

- and -

HER MAJESTY THE QUEEN IN RIGHT OF CANADA

Defendant

ORDER

UPON motion by the defendant for:

42.                                                                                                An Order pursuant to Rule 221(a) of the Federal Court Rules, 1998, striking out the Statement of Claim and dismissing the action with costs on the ground that it discloses no reasonable cause of action; and

                                                                                                                                     Page: 2

43.                                                                                                In the alternative, an Order pursuant to Rule 8 of the Federal Court Rules, 1998, extending the time for serving a Statement of Defence to 30 days from the date of the issuance of the Order.

THIS COURT ORDERS that:

1)                                                                                                    The defendant's motion to strike is denied.

2)                                                                                                    The defendant shall have until 30 days from the date of the issuance of this Order to serve and file a statement of defence.

3)                                                                                                    Costs are to the plaintiffs in any event of the cause to be assessed by reference to Column III of Tariff B.

         "R. Aronovitch"        

Prothonotary