Court of Appeal Confirms Constitutional Invalidity of Sections of the Pay Equity Act

By Audrey Boctor

On October 12, 2016, the Court of Appeal (Rochette, Doyon, Gagnon, JJ.A.) confirmed a judgment of the Superior Court (Martin, J.S.C.) declaring provisions of the Pay Equity Act unconstitutional in its decision in Québec (Procureure générale) v. Alliance du personnel professionnel et technique de la santé et des services sociaux, 2016 QCCA 1659.

The Pay Equity Act was adopted in 1996 and came into force in relevant part in November 1997.  Its goal was to ensure that pay equity would be both achieved and maintained in the workforce.

Reports in 2006 showed that one in two private companies had still not complied with the Act, and that mechanisms for ensuring that pay equity would be maintained when changes occurred in the workplace were inadequate.

After a series of public consultations, the Act was amended in 2009.  Pursuant to the amendments, an employer who has completed a pay equity plan or adjustments must conduct a pay equity assessment every 5 years and post the results (ss. 76.1-76.3). As part of the assessment, employers must evaluate any changes that have occurred in the workplace (i.e. promotions, changes in responsibilities) and determine whether pay adjustments are required.  Employees then have 60 days to comment or request further information, and employers are given a further 30 days to respond with a new posting (s. 76.4).  Any required compensation adjustments apply only as of the time limit for the new posting (s. 76.5).

The Court of Appeal upheld the trial judge’s decision and held that ss. 76.3 and 76.5 breached the right to equality contained in s. 15(1) of the Canadian Charter in a manner that could not be justified under s.1, and that ss. 10 and 9.1 of the Quebec Charter dictated the same result.  In particular, the Court held that s. 76.3 provided insufficient information to enable employees to evaluate whether the assessment had been carried out properly.  As for s. 76.5, by making pay adjustments applicable only as of the date of the new posting and not retroactive to the date of the relevant change, an employee could conceivably lose over 5 years of salary adjustment. The lack of retroactivity therefore exacerbated the very inequality the Act was meant to redress. As such, the provisions were not rationally connected to their objective and could not be justified:

[87] […] Les mesures privilégiées sont inéquitables, arbitraires et portent atteinte lourdement au droit à l’égalité plutôt que d’en assurer le respect fermement, rapidement et efficacement.

[88] Tous reconnaissent que l’examen du maintien de l’équité salariale peut être ponctuel, mais il coule de source que plus l’exercice est espacé dans le temps, plus il risque de provoquer des distorsions et des injustices si les ajustements salariaux en découlant ne prennent pas en compte le temps écoulé depuis que le changement est survenu. Ici, la Loi modificatrice fait en sorte que, pendant des épisodes pouvant aller jusqu’à 62 mois, l’iniquité salariale, bien que constatée et démontrée, sera tolérée sans être compensée, au détriment des salariées. L’article 76.5, qui fait remonter les ajustements salariaux à compter de la date à laquelle l’affichage doit avoir lieu, n’est ni nécessaire ni raisonnable. Au surplus, on peut se demander s’il ne risque pas d’ouvrir une brèche dans la fondation de la réforme du maintien en amenant des employeurs à opérer des changements de tâches chez les salariés à tel moment plutôt qu’à tel autre. La question mérite d’être posée.

[89] Le caractère déraisonnable de la disposition ressort encore davantage lorsque l’on considère que 40 ans se sont écoulés depuis l’entrée en vigueur de la Charte québécoise et 20 ans depuis l’entrée en vigueur de la LES.

The declaration of invalidity is suspended for one year or until new measures are adopted, whichever comes first.