Ottawa appeals a multibillion-dollar compensation ruling
The price of equity
Ottawa appeals a multibillion-dollar compensation ruling
Carol-Anne Grenier reckons the government owes her $20,000, and she is seething with anger at Prime Minister Jean Chrétien’s refusal to pay up. Grenier, 43, has worked for nearly two decades in the public service, currently for about $29,000 a year at Statistics Canada, where she spends her days mainly punching data into a computer terminal. For the past 14 years, her union, the Public Service Alliance of Canada, has been fighting for a pay equity settlement for about 200,000 workers who, like Grenier, toil in the socalled pink collar ghetto. A landmark Human Rights Tribunal ruling in the union’s favor on July 29 would force the government to pay up to $5 billion—far higher than the $1.3 billion the government has been offering—as compensation for the wage gap between jobs mostly done by women and those dominated by men. So it was no surprise when the government announced last week it would appeal that decision to the Federal Court of Canada, a move Grenier says left female civil servants deeply demoralized. “Most people where I work are so frustrated right now,” she says, “that nothing is getting done.”
The government, though, is more than willing to risk a slump in bureaucratic productivity to save a few billion dollars. And, if a recent court ruling is any guide, it stands a good chance of doing just that with its appeal. The tribunal’s decision used a controversial formula to calculate how much workers in mainly female occupations are owed for past wage inequality. But in another pay equity dispute, between Bell Canada and three of its unions, a Federal Court judge last March rejected the tribunal’s approach—and suggested a much less generous payment formula. The government is banking on the court again overruling the tribunal in the public service case. Still, Treasury Board president Marcel Massé, the cabinet minister who runs the bureaucracy, insists he would prefer an out-of-court deal. “Any problem that lasts for 14 years leaves a lot of people frustrated,” he told Maclean’s. “Fd prefer a quick and dirty solution—the $1.3-billion settlement I’ve proposed—even though going to court might cost us less.”
Angry union leaders are in no mood to bargain. “Big deal— the $1.3 billion is still on the table,” fumed PSAC president Daryl Bean. Although he views the government’s estimate of $5 billion as too high, Bean expects his members to collect $3 billion to $4 billion if the tribunal’s ruling survives appeals.
The union is incensed by the fact that Chrétien has broken a
pledge he made—in writing—when he was still Opposition leader in 1993 that a Liberal government would abide by whatever the tribunal found. Last week, Chrétien said he made that promise five years ago on the assumption the tribunal’s findings would cost the government less than $1 billion. In fact, even experts in the arcane field of pay equity arbitration admit it would have been hard to predict how high the number could go. They say arriving at an incontestable answer in such cases is all but impossible. “It’s a political decision,” says Hermann Schwind, director of Saint Mary’s University’s executive MBA program and an expert on salary issues. “There is no way to objectively calculate the value of a job.”
In the federal dispute, PSAC and the government agreed to assess the value of public sector positions based on a points system. It took into account the skill a job demands, the level of responsibility, the working conditions and the amount of effort required. But after jobs had been assigned a certain number of points, the process broke down over how to compare occupations. The government wanted to contrast pay between groups that had scored about the same value— say, a female-dominated class such as clerical workers, with one maledominated category such as laborers and tradesmen. The union preferred a more statistically complex scheme that shows a much wider wage gap, and the tribunal agreed. This formula compares pay in a female-dominated group with the pay for all male-dominated jobs that scored in the same range under the points system. That led, in one example cited by the government, to a group of mainly female clerks being compared with a large, diverse class of mostly men’s jobs, ranging from laborers to economists and computer technicians.
A huge gulf separates the awards that would be made under the two systems. Massé contends that directly comparing job groups
would result in only about $150 million in payments, mainly to women. The union says the government’s $5-billion projection of the cost of the tribunal’s formula is too high, but estimates that payments would still total $3 billion to $4 billion. And the case could have a tremendous effect on other disputes. Along with Bell Canada, pay equity battles are raging between unions and Air Canada, Canadian Airlines and Canada Post. Roy Heenan, a Montreal lawyer who represents all of those federally regulated companies, argues few Canadians would accept the tribunal’s approach—even if they could understand it. “Most of the public thinks we’re comparing either the same jobs or very similar jobs,” Heenan says. “That would be fair. They don’t think we’re looking at composites or mathematical formulas or statistics.” But defenders of the tribunal decision argue the complexity of the formula does not invalidate its conclusions. “It’s wrong to say this is a statistical jumble and a bunch of nonsense,” says Margot Young, a University of Victoria law professor and a member of the National Association of Women and the Law, a lobby group of lawyers and academics. “People have spent a lot of time thinking about how to do this in the way that is the most fair.” The government, however, now questions whether the current law is clear enough to be a prescription for fairness. The principle of equal pay for work of equal value was entrenched in federal law as part of the Canadian Human Rights Act, which came into force in 1978, and covers the government and the economic sectors it regulates. But the federal law is short of details—at least up to now. “Clearly, the law has been couched in very general terms that lead the courts to give different interpretations,”
Massé said. “We intend to review the law and put together a series of guidelines on how you reach pay equity.” Those new rules, however, cannot be made to apply retroactively, Massé admits. That leaves it up to the tribunal and the courts to settle the outstanding disputes. The tribunal gets first crack at complaints about possible violations of the Canadian Human Rights Act. But its decisions can be challenged in the Federal Court. In its key ruling last March, the court shot down the tribunal’s handling of almost every aspect of the Bell Canada pay equity dispute. Among the court’s findings: the same unions that have ne gotiated pay levels in contracts should not be allowed to later complain to the tribunal that those wages discriminate against women. The court also interpreted the Human Rights Act’s section on pay equity as dictating a narrow comparison between specific jobs—not the tribunal’s broader formula. Bell’s unions have appealed to the Federal Court of Appeal, which is not expected to rule before late this year or early 1999. Both the Bell case and the federal public service dispute could take years to settle and might end up in the Supreme Court of Canada. Meanwhile, those who wanted the government to simply pay up are warning of dire political consequences. Last week, union protesters dogged Chrétien as he travelled in New Brunswick, hanging him in effigy and chanting “liar, liar” at one stop. But Ottawa is also weighing some cold numbers. Polling conducted for the government found strong support for the principle of pay equity, but not for a multibillion-dollar settlement. The government may be counting on public support for a decision—even one that breaks an old commitment—that promises to safeguard taxpayers’ money. □
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