Meaning of Same establishment in Pay Equity Disputes
   
A pay equity dispute involving flight attendants working for Air Canada was the subject of a complaint filed with the Commission in November of 1991. Predominantly female flight attendants alleged that they were discriminated against by being paid lower wages and having a salary structure that required more time to reach maximum salary than was the case for male dominated comparator groups. The comparator groups were identified as (i) first and second officers who fly the air planes, and (ii) workers who provide maintenance and other technical services in and around Air Canada's air planes and places of operations. A similar complaint was also filed against Canadian Airlines International in July of 1992.

Early in the investigative process, both companies defended their wage policies by arguing that the groups of workers with whom the flight attendants compared themselves were not employed in the same "establishment" within the meaning of section 11 of the CHRA.²⁶⁵To resolve this preliminary issue (which had prompted the respondent companies to seek a judicial order prohibiting further consideration of the complaint) a special three-person Tribunal was appointed to consider how the notion of "establishment" should be interpreted and applied. Consideration of this issue ultimately involved as well the meaning to be given to section 10 of the Equal Wages Guidelines (EWG) adopted under subsection 27(2) of the CHRA:

For the purposes 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 a policy is administered centrally.²⁶⁶

The Tribunal found that a proper interpretation of these provisions did not preclude the consideration of collective agreements. In other words, in determining whether employees of the same employer were subject to a common personnel and wage policy, neither section 11 of the CHRA nor section 10 of the EWG precluded the consideration of collective agreements. They constituted one factor amongst many that should be considered in reaching a decision. The Tribunal also concluded that section 11 did not establish a corporate definition of establishment, in the sense that all employees of the same employer were deemed to be working in the same establishment. Caution should therefore be exercised in considering such factors as "core function", "interrelatedness" of workers, and management rights in unionized work places that apply across bargaining units. It emphasized that a functional approach was necessary to arriving at a proper understanding of the word "establishment", one that included a consideration of general human resources policies but did not exclude the consideration of collective agreements.

In applying this interpretive approach to the facts of the complaint, the Tribunal concluded that the three groups of employees represented by the "pilots", "flight attendants", and "technical operations personnel" were separate establishments within the meaning of section 11 of the CHRA. It underscored that these three groups had had different bargaining units and collective agreements for many years, and that the certification process for these units had included an assessment of the common interests of their respective employees, including wages, hours and working conditions. The vast majority of wage and personnel policies applicable to each group was contained in collective agreements negotiated by each bargaining unit. Even though some elements of human resources policies and negotiating strategies of the respondent companies were common across all three groups, the Tribunal found this to be insufficient to negate the clear impact of the terms and conditions set out in the separate collective agreements. An appeal of this decision to the Federal Court was taken by both the Commission and the Canadian Union of Public Employees (CUPE) representing the flight attendants.²⁶⁷

A key issue before the Federal Court concerned the legal interpretation to be given the phrase "notwithstanding any collective agreement" found in section 10 of the EWG. The Tribunal had rejected the argument that this phrase precluded a consideration of collective agreements in determining if groups of employees were subject to a common personnel and wage policy. The Federal Court agreed with the reasoning of the Tribunal in this regard, in part because the use of the word "notwithstanding" was not intended to resolve a conflict or inconsistency between provisions analogous to that which might exist between two sections in the CHRA, such as between subsection 11(1) and 11(4) or between subsection 9(1) and 9(2). ²⁶⁸Moreover, to decide otherwise would lead to inconsistent applications of the definition of wages found in subsection 11(7) of the CHRA depending on whether factors identified in subsection 11(7) were contained in collective agreements or not. As the Court declared: "The logical consequences of the applicants' argument would be that wage comparisons for the purpose of subsection 11(1) would include a consideration of all the elements of remunerations listed in subsection 11(7), but at the same time, the search for wage commonalities to determine which employees fall within one establishment would exclude a consideration of the elements of remuneration listed in subsection 11(7) if they were contained in collective agreements."²⁶⁹ While the Court agreed that the examination of a collective agreement was relevant to the issue of a common personnel and wage policy, all other factors and elements beyond such agreements must be considered as well.

Tribunal rulings on the admissibility of evidence were also challenged as constituting a breach of the principles of natural justice. Given its primary mandate to inquire into the meaning and application of the notion "establishment", the Tribunal had refused to allow expert evidence to be led with respect to gender predominance in certain occupational groups at Air Canada, as well as general contextual evidence tending to show systemic wage discrimination against women as a result of occupational segregation. With respect to the former, the Court agreed with the Tribunal that it was not relevant to determining what the word "establishment" meant, nor was it relevant with respect to determining whether the alleged comparator groups worked in the same establishment as the flight attendants. By limiting the scope of comparison to employees in the same establishment, section 11 of the CHRA established a threshold test that had to be met "before the issue of the gender predominance of an identifiable occupational group [became] relevant."²⁷⁰

The Court found that the general contextual evidence rejected by the Tribunal related to "systemic discrimination generally and to the knowledge and theories underpinning this type of discrimination."²⁷¹ Nevertheless, the Court pointed out that the Tribunal ruled it would consider "the social and historic context of systemic wage discrimination within the parties' arguments and submissions"²⁷² and thus "afforded the applicants the opportunity to present the contextual information..."²⁷³ This being the case, the Court could see no breach of the principles of natural justice.

The Federal Court also rejected arguments to the effect that the Tribunal's interpretation of the notion of "establishment" failed to implement the underlying purpose of section 11 by allowing separate collective agreements to perpetuate systemic wage discrimination against women. The Court pointed out that this argument was based upon a false premise, namely, that the Tribunal decision stands for the proposition that an "establishment" will always equate to one bargaining unit or one collective agreement. While such a relationship is reflected in the specific facts of this case, the functional approach set out in the Tribunal decision to determining when employees are subject to a common personnel and wage policy cannot be said to lead necessarily to this result. On the other hand, reasoned the Court, excluding the consideration of collective agreements from such a determination would essentially result in a corporate definition of establishment and run contrary to the clear intent of Parliament.

Table of contents  Previous page  Next page

End Notes