Dartmouth (City) v. Nova Scotia (Pay Equity Commission)

Dartmouth (City) v. Nova Scotia (Pay Equity Commission) Court Court of Appeal Date 1994-10-04 Citation 1994 NSCA 183 Docket CA 103529 Judge/Registrar/Adjudicator Freeman, Gerald B. (Honourable Justice) (CA); Matthews, Kenneth M., (Honourable Justice); Pugsley, Ronald N. (Honourable Justice) Document Type Decision Decision Content C.A. No. 103529 NOVA SCOTIA COURT OF APPEAL Cite as: Dartmouth (City) v. Nova Scotia (Pay Equity Commission), 1994 NSCA 183 Matthews, Freeman and Pugsley, JJ.A. BETWEEN: CITY OF DARTMOUTH ) W. Augustus Richardson ) for the Appellant Appellant ) ) ) - and - ) ) ) Reinhold M. Endres,Q.C. ) for the Respondents ) THE PAY EQUITY COMMISSION and ) GAIL CANN, JEAN DOBSON, HEATHER ) ROBINSON, PAM COLE and DON ) MELANSON, Chairperson and Members ) Respectively of The Pay Equity ) Commission ) ) Respondents ) ) ) Appeal Heard: ) September 20, 1994 ) ) Judgment Delivered: ) October 4, 1994 ) ) ) THE COURT: The appeal is dismissed without costs, per reasons for judgment of Freeman, J.A.; Matthews and Pugsley, JJ.A. concurring. FREEMAN, J.A.: The issue in this appeal is whether the City of Dartmouth was entitled to contract out to a private sector employer the services of its crosswalk guards, predominately women, thereby avoiding a requirement to increase their remuneration as the result of a process under the Pay Equity Act, R.S.N.S. 1989 c. 337. Section 2 of the Act provides: The purpose of this Act is to increase the pay of employees in classes which are predominately female where it is determined, by the process set out in this Act, that, by reason of sex discrimination, those employees are paid less than they should be. The Act engages public sector employers in a lengthy process controlled by a Pay Equity Commission intended to identify, evaluate and eliminate pay differentials resulting from sex discrimination. For municipalities and their employees that process began October 1, 1990, pursuant to s. 11(3) of the Act. The scheme of the Act provides for employers and employee representatives to reach agreement at four separate stages of the process, and the commission is empowered by s. 7(1)(c) to determine, in accordance with the Act, matters on which they fail to agree. Under s. 7(2), (2) Where the Commission makes a determination pursuant to clause (c) of subsection (1), its decision is final. That is the only provision of the Act which might be considered a privative clause. Section 12 of the Act provides: Within six months of the pay equity process beginning, an employer and all of its employee representatives shall endeavour to agree upon a single system, that does not discriminate on the basis of sex, for the evaluation of all female-dominated classes and male-dominated classes employed by the employer and, where there is failure to agree within the six months, a determination shall be made within a further two months by the Commission and such determination is an agreement for the purpose of Section 13. Section 13 provides for sex discrimination in pay for work performed by females in female-dominated classes to be identified, by comparisons with the pay of workers in male-dominated classes, and eliminated. Section 3(1)(j) defines "female-dominated class" as "a group of ten or more employees with the same employer in the same classification, where sixty per cent or more of the employees are female." Clause (m) defines "male-dominated class" by a similar standard. Section 3(2) provides that numbers referred to in those definitions shall be determined as of the date the clause came into force. Additional public sector corporations or bodies can be added by regulation to those targeted in the schedule to the Act, but there is no provision in the Act for termination of a process once it has started. The obvious intention of the legislation is that once the pay equity process has begun, it is to continue until elimination of sex discrimination in the pay of those classes of employees identified at the commencement of the process has been achieved. Section 15 of the Act provides that in achieving pay equity no employer shall reduce the pay of any employee. Section 18 provides: 18 (1) Throughout the pay equity process an employer shall . . . (c) bargain in good faith, making every reasonable effort to reach agreement. The evaluation of the pay of the Dartmouth crosswalk guards was carried out by the City of Dartmouth Pay Equity Committee. On March 6, 1992, the city administrator, John Burke, wrote Jean Dobson, executive director of the Pay Equity Commission, to advise the job evaluation portion of the pay equity process had been completed. As of the date of commencement of the process there were sixty-six crosswalk guards being paid $7.73 an hour. As a result of the evaluation following criteria set out in s. 13 of the Act, Mr. Burke advised that the crossing guards were entitled to be paid at a new rate of $13.45 an hour. The city was then obliged by s. 13 of the Act to apply the agreed new rate to eliminate sex discrimination in pay, phasing it in over a four-year period. Crosswalk guards are not unionized; they work 12 1/2 hours a week. They were stationed according to the direction of city council, supplied with city equipment, and charged with the responsibility of ensuring safe pedestrian crossings for children on their way to and from school. They were paid from funds budgeted to the police department. A constable was assigned full time to oversee the program, and absent guards were replaced by police constables. The City of Dartmouth was struggling with budget problems, and reduced the number of guards in 1991. Further reductions in 1992 were suggested by Mr. Burke in the budget he submitted to the mayor and council on March 23, 1992. An allocation for crosswalk guards was deleted from the 1992 budget pending a review of "less costly arrangements." The city issued a call for tenders for crosswalk guard service in July 1992. The successful bidder was to "offer full employment on a preferential basis to all present employees found to be suitable." Eagle Security Services submitted the successful tender, and by a motion passed by a 6-5 majority the city agreed to contract with that company for the services of 51 crosswalk guards. Council had to vote for an over-expenditure to meet the cost of the contract because of the omission of crosswalk guards from its budget. Eagle Security hired the crosswalk guards for $5.50 an hour, down from the $8.24 an hour they had been receiving immediately prior to the city's contract with Eagle Security. They were no longer paid for statutory holidays and were required to arrange their own replacements when absent. Otherwise their duties remained the same. In October, 1992, the guards met with the police department, Eagle Security and the city administrator to discuss a number of complaints. They requested a $2.00 an hour pay increase. Eagle Security agreed to the increase provided the city would fund it. After consideration, council defeated a motion for a direct pay increase but passed a motion to increase the contract price with Eagle Security so the guards could be paid a $2.00 hourly increase retroactive to September 1, 1992. The necessary over-expenditure was approved by council. In a memorandum to the mayor and council dated October 15, 1992, Mr. Burke stated: The Guards were upset that they were now going to lose the benefit of Pay Equity adjustments which would have increased their pay by more than 60 % over the next 4 years. It is our position that, indeed, contracting out will have relieved the City of its previous obligation to make Pay Equity adjustments. The Pay Equity Commission conducted a hearing into the matter in March, 1993. Counsel for the guards argued that "parties may not contract for the purpose or result of avoiding the application of human rights or other public purpose legislation." The Commission issued a decision in May, 1993, concluding: The Commission accepts that Eagle is now the employer but finds that the Pay Equity Act, properly interpreted, prohibits the contracting out of services performed by persons in positions identified as the proper recipients of pay equity adjustments if the effect is to reduce the pay below the level of what these persons would have received had their services not been contracted out. It is the Commission's view that the process engaged in by the City and its employees, as with all joint processes administered under the Pay Equity Act, are not concluded until the final adjustments are received by the female dominated classes entitled to receive such adjustments. Accordingly the City of Dartmouth is ordered to ensure that the guards are remunerated at the rates determined by the pay equity process and to ensure that the pay adjustments are made retroactive to the originally scheduled implementation date of October 2, 1992. The city applied to the Supreme Court of Nova Scotia for certiorari to quash this decision, a supplementary decision and the resulting order. The application was refused by Justice Hall. This appeal is from his decision on the following grounds: 1. The learned Justice erred in fact and in law in failing to issue an Order of certiorari to quash and set aside the decision and Order of the Respondent, The Pay Equity Commission (the "Commission"), dated May 6, 1993 and supplementary decision dated May 19, 1993 upon the following grounds: a. the Commission exceeded its jurisdiction under the provisions of the (Pay Equity Act) . . . b. the Commission erred in its interpretation of its jurisdiction under the ( Pay Equity Act); c. the Commission made an Order which was wholly outside of its jurisdiction under the (Pay Equity Act);̣ ̣ ̣ 2. The learned Justice erred in law in concluding that even though the crossing guards were not employed by the Appellant city, the City must nevertheless subsidize their pay to the rates that they would have been entitled to under the Pay Equity process, notwithstanding the absence of any statutory provision permitting such an Order; 3. The learned Justice erred in law in concluding that even though the Commission lacked the jurisdiction to prohibit contracting out, it was nevertheless entitled to order the Respondent City to ensure that the employees of its independent contractors were treated as if they were subject to the Pay Equity process. . . . The grounds of appeal correctly identify the issues, which relate to the jurisdiction of the Pay Equity Commission. The basic question is whether the city can oust the jurisdiction of the commission, which was fixed by statute at the commencement of the process, by unilaterally purporting to alter the employment status of the crossing guards before the process has achieved its objective. Counsel referred to the copious jurisprudence on the standard of judicial review, citing in particular Canada (Attorney General) v. (Public Service Alliance of Canada (PSAC No. 2) (1993), 150 N.R. 161 (S.C.C.), Dayco (Canada) Ltd. v. CAW-Canada (1993), 152 N.R. 1 (S.C.C.); Canada (A.-G.) v. Mossop (1993), 100 D.L.R. (4th) 658 (S.C.C.) and University of British Columbia v. Berg (1993), 102 D.L.R. (4th) 665 (S.C.C.). It was pointed out that the Pay Equity Act lacks a privative clause other than s. 7(2), and that it is neither a true labour tribunal nor a true human rights tribunal. In Canada (A.-G.) v. Mossop (1993), 100 D.L.R. (4th) 658 (S.C.C.) at p. 670 Chief Justice Lamer stated: . . . Absent a privative clause, the courts have shown curial deference vis-`a-vis certain specialized tribunals when interpreting their own Act. The question is therefore whether a tribunal set up under the C.H.R.A. (Canadian Human Rights Act) is such a body. On this point, this court, my colleague L'Heureux-Dubé J. dissenting, just a few months ago, in Zurich Insurance Co. v. Ontario (Human Rights Commission) (1992), 93 D.L.R. (4th) 346 at p. 373, [1992] 2 S.C.R. 321, 16 C.H.R.R. D/255, found that such a board does not have the kind of expertise that should enjoy curial deference on matters other than findings of fact: In spite of the ability to overturn decisions of the board on findings of fact, this court has indicated that some curial deference will apply even to cases without privative clauses to reflect the principle of the specialization of duties: see Bell Canada v. Canadian Radio-television and Telecommunications Commission 1989, 60 D.L.R. (4th) 682 at p. 699, [1989] 1 S.C.R. 1722, 38 Admin. L.R. 1; Etobicoke, supra, at p. 22. While curial deference will apply to findings of fact, which the board of inquiry may have been in a better position to determine, such deference will not apply to findings of law in which the board has no particular expertise. It seems to me that this should have put the matter to rest. Considerations of the standard of review and curial deference relate to the degree of error tribunals can fall into before courts should intervene. These considerations lose much of their relevancy when, as in the present case, the reviewing court has not been persuaded the tribunal was wrong. There is then no reason not to apply the standard of correctness. Justice Hall referred to the city's duty to bargain in good faith pursuant to s. 18(1)(c) of the Act and stated: . . . I share the view expressed by the Commission that in unilaterally deciding to contract out the crossing guard service in the circumstances prevailing here the city failed to bargain in good faith, even though the City may have felt driven to take that action because of its financial constraints. In my opinion, an employer may not with impunity take action in breach of its obligation to bargain in good faith to thwart or defeat the fundamental purpose of the legislation, viz. to increase to equitable levels the pay of classes of occupations which are predominately female as stated in section 2 of the Act. The Pay Equity Act is human rights legislation. It is my view, and I believe the generally accepted view among jurists, that human rights legislation must be given a liberal interpretation so as to give effect to the intent of the legislation. In other words, it must be interpreted if reasonably possible to remedy the inequality that it was intended to correct or to eliminate discrimination. As Sopinka, J., said in Public Service Alliance of Canada (P.S.A.C.) v. Attorney General of Canada and Econosult Inc. ((1991) 48 Admin. L.,R. 161), in dealing with issues concerned with jurisdiction "a pragmatic, functional approach must be adopted." In my respectful opinion, that is the approach the Commission followed or adopted in deciding the issues before it. As I interpret its decision, it concluded that it had jurisdiction over the parties at the time the pay equity process commenced and that it continued to have jurisdiction up to the time that the guards' services were contracted out. Further, it concluded that it did not lose jurisdiction as a result of the contracting out by the City in breach of its obligation to bargain in good faith. In other words, that the Commission had jurisdiction from the beginning of the pay equity process through to the hearing. In my opinion it was strongly supported in this position by virtue of its obligation under paragraph 7(1)(b) to monitor the implementation of pay equity. In its decision the Commission did say that the Act prohibits the contracting out of services in circumstances that existed here. Ms. Hood objected to this proposition contending that the Commission does not have jurisdiction to prohibit contracting out. I agree. The essence of the Commission's decision, however, is contained in a subsequent paragraph where it stated that the city "is ordered to ensure that the guards are renumerated at the rates determined by the pay equity process . . . " I interpret this to mean that even though the guards are not directly employed by the City, the City must subsidize their pay to the rates that they would have been entitled to under the pay equity process. I am satisfied that they have jurisdiction to make such an order and committed no error in doing so. To some it may seem to be a rather bizarre result that a municipality must subsidize wages of the employees of a private contractor which has contracted to provide services for the municipality. From a pragmatic point of view, however, it is likely to have the desired result of enforcing compliance with the Act. The commission and Justice Hall were obviously mindful of the purpose of the Pay Equity Act and the importance of upholding it. In University of British Columbia v. Berg (1993) 102 D.L.R. (4th) 665 (S.C.C.). Lamer C.J. stated at p. 677: " . . . this court has had many occasions to comment on the privileged status of human rights legislation. In Ontario (Human Rights Commission) v. Simpsons-Sears Ltd, supra, McIntyre J. observed (at p. 329) that "[l]egislation of this type is of a special nature, not quite constitutional but certainly more than the ordinary--and it is for the courts to seek out its purpose and give it effect." This court has repeatedly stressed that a broad, liberal and purposive approach is appropriate to human rights legislation, and that such legislation, according to La Forest J. in Robichaud, supra, at p. 580, "must be so interpreted as to advance the broad policy considerations underlying it". These comments serve to underline the importance of the mandate of s. 12 of the Interpretation Act, R.S.C. 1985, c. I-21, which directs that "[e]very enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects." In Toronto Transit Commission v. City of Toronto [1971] S.C.R. 746 at p.752 Spence J. stated: . . . [I]n every case the meaning of the statutory provision must be obtained by consideration not only of the actual words in a subsection but of the whole statute and by considering the purpose of the legislation. These citations are applicable not only to the general result arrived at by the commission and Hall J. in keeping with the intent of the Act, but more particularly with reference to s. 19, which provides: 19 Where there is a conflict between an agreement on pay equity made pursuant to this Act and another agreement, the agreement on pay equity prevails over the provisions of the other agreement with respect to pay. While this section may have been inspired by provisions that collective bargaining involve a process distinct from the pay equity provisions, there seems no good reason to conclude that the term "other agreement" used in s.19 is not broad enough to include the agreement between the City of Dartmouth and Eagle Security. Such an interpretation would appear to represent the "pragmatic, functional approach " urged by Sopinka J. in the P.S.A.C. case, providing an outcome apt to the circumstances of this case. The Pay Equity Act does not specifically forbid contracting out to avoid obligations under that Act, as does s. 31(2) of the Trade Union Act, R.S.N.S. 1989 c. 475, which applies to individuals and to companies with the powers of individuals in the private sector. Such a prohibition is unnecessary in the context of the present case because there must be statutory authorization for all acts done by municipalities. Whatever contracting powers municipalities enjoy under other statutes, the Pay Equity Act does not authorize them to enter into contracts which have the effect of defeating its purposes. Both the commission and Justice Hall found that the city breached s. 18(1)(c) of the Act by failing to bargain in good faith. In so doing it acted without lawful authority. Its contract with Eagle Security, to the extent that it conflicts with the Pay Equity Act, is ineffective to reduce the pay of the crosswalk guards from the level to which they were found entitled by the pay equity process. The commission merely took cognizance of this in finding that the city was still under a duty to ensure that the guards were paid at the level required by pay equity. That is a statutory requirement of the Pay Equity Act. The city was under a duty to seek agreement in good faith with its employee representatives as to implementation of the new pay level, the next stage in the pay equity process, when it attempted to contract out the guards' services. Clearly, there was no agreement by the city and the employee representatives of the crosswalk guards with respect to the contract with Eagle Security. It was within the jurisdiction of the commission pursuant to s.7(1)(c) of the Act to determine in accordance with the Act a matter upon which the employer and its employee representatives failed to agree. Section 11(3) of the Pay Equity Act locks municipalities into a statutory process; it determines the process to be followed, and it provides no means of escaping that process. The relevant time for determining the employment status of employees is when the process begins, October 1, 1990. A municipality, in particular, is required to bargain in good faith pursuant to s.18 and to avoid lowering the wage of any employee on achieving pay equity pursuant to s.15(3). An employee can only mean an employee of a class determined at the relevant time, when the process began on October 1, 1990. If a municipality enters into a contract lawful in other respects for the services of persons identified as of October 1, 1990, as members of a female dominated class then employed by the municipality, the contract must provide, implicitly or explicitly, for them to be paid in accordance with the principles worked out in the pay equity process. In my view the Pay Equity Act admits of no other interpretation. Budgetary concerns are of vital importance to municipalities, but budgets must be balanced without resort to the savings generated by paying women less than a pay equity process has found to be equitable. With respect to the Dartmouth crossing guards it is irrelevant whether the wages paid to women by Eagle Security are equal to those of its male employees. The relevant consideration for the crossing guards is the level of pay determined by the process under the Pay Equity Act that began October 1, 1990. Subsequent efforts to contract out cannot change that. The situation might have been different if the contracting out had occurred prior to October 1, 1990, but it is not necessary to consider that. The Pay Equity Commission committed no reviewable error as to fact, law or jurisdiction, as Justice Hall found, and he committed no reversible error in upholding its decisions and order by refusing certiorari. The appeal is dismissed. Counsel have agreed that because of the novelty of the issues there should be no costs. J.A. Concurred in: Matthews, J.A. Pugsley, J.A. .