Name of Case: Public Service Alliance of Canada v. Canada Post Corporation

Date of Decision: November 17, 2011

Supreme Court Panel: Chief Justice Beverley McLachlin, and Justices Louis LeBel, Marie Deschamps, Morris Fish, Rosalie Abella, Marshall Rothstein, Thomas Cromwell, Michael Moldaver and Andromache Karakatsanis

Judgment under Appeal: Judgment of the Federal Court of Appeal dated February 22, 2010

Facts: The lengthy legal saga began in 1983 when PSAC filed with the Canadian Human Rights Commission a pay equity claim under s.11 of the Canadian Human Rights Act, which prohibits "differences in wages between male and female employees employed in the same establishment who are performing work of equal value," on behalf of a group of mainly female clerical workers (the CR classification) employed by Canada Post Corporation. It argued that these employees were paid less for work that was equal in value to the work performed by the mainly male 40,000-member postal operations group (the PO classification) that comprised letter carriers and mail handlers and sorters.

Case History:

Tribunal awards PSAC members $150 million plus interest

After investigating for a decade, in March 1992 the Commission referred PSAC's complaint to the Tribunal for adjudication. It took the Tribunal, in turn, in excess of 10 more years, until August 2003, to hold 410 days of hearings spread over the decade. Finally, on October 7, 2005, the Tribunal rendered its decision in favour of the PSAC workers.

In its decision, the Tribunal accepted PSAC's use of the PO group as the comparator even though, while the PO group was male-dominated, it also contained 10,000 women, the largest group of female employees in the corporation, who worked as mail sorters at a classification level that was the highest paid union position and had equal numbers of male and female employees.

While upholding the union's complaint, the Tribunal held that the amount of damages awarded should take into account the relative reliability of the evidence. In its view, where job information and evidence relating to non-wage forms of compensation fit within the "upper reasonable reliability" sub-band, the damages award should reflect 100 percent of the wage gap; where the evidence falls in the "mid reasonable reliability" sub-band, the award should reflect 75 percent of the wage gap; and where it falls in the "lower reasonable reliability" sub-band, the award should be 50 percent or less of the wage gap.

Accordingly, the Tribunal discounted its award to the claimant employees by 50 percent, awarding them $150 million to correct the "significant" wage gap between 1982 and 2002 when Canada Post introduced a new pay classification system. PSAC estimates that, with interest, the total amount of the required payouts had grown to approximately $250 million by the time of the Supreme Court's decision.

Federal Court overturns Tribunal's award

In a February 21, 2008 decision, [2008] F.C.J. No. 273 (QL), reviewed in Lancaster's Women/Pay Equity Employment Law eNewsletter, April 17, 2008, Issue No. 23, Federal Court of Canada Judge Michael Kelen overturned the Tribunal's decision on judicial review. In his opinion, it was illogical and unreasonable that the Tribunal had in effect considered the 10,000 highly-paid women in the PO group to be men for purposes of the wage analysis, and also that the Tribunal had applied a standard of reliability to the evidence that fell short of the required civil standard of a balance of probabilities. With regard to the latter issue, Justice Kelen held that "[t]he Tribunal erred in law in applying a confusing, invented, and novel standard of proof with respect to the reliability of the job information in order to find liability." He further considered that "[b]y reducing the damage award by 50 percent, the Tribunal indirectly confirms that it does not think that the evidence was reliable on the balance of probabilities. At the end of the hearing, if the evidence on liability is evenly balanced, the balance of probabilities has not been tilted in favour of the complainant, and the complaint must be dismissed."

PSAC appeal dismissed, but Evans dissents

In a February 22, 2010 decision, [2010] F.C.J. No. 272 (QL), reviewed in Lancaster's Women/Pay Equity Employment Law eNewsletter, May 18, 2010, Issue No. 40, the majority of a three-member panel of the Federal Court of Appeal dismissed PSAC's appeal of Kelen's judgment, agreeing with his reasoning. Justices Edgar Sexton and Michael Ryer ruled that "[i]n our respectful view, the Tribunal became confused, and therefore fell into error." However, in a detailed 24-page dissent, Justice John Evans explained why he would have allowed the appeal and would have restored the Tribunal's decision.

Justice Evans emphasized that "courts never intervene lightly in the administrative process, both out of deference to the expertise of specialized tribunals and in recognition of the limitations of reviewing courts' perspectives on the problem before the agency. Further, setting an administrative decision aside, whether or not the matter is remitted to the tribunal for re-hearing, inevitably results in a waste of resources. These considerations are particularly apt in this case: the subject-matter of these proceedings is complex and has some highly technical aspects, and, as already noted, the public and private resources already spent on this dispute must be enormous."

He also observed that "[t]he resolution of pay equity claims involves a mix of art, science, human rights, and labour relations. It can be difficult to fit multi-disciplinary inquiries of this nature within a legal framework: social scientists and management consultants do not always express themselves in the same terms as lawyers, on questions of evidence and proof, for example."

With regard to the Tribunal's choice of comparator group, Evans held that "[t]here is little law on the selection of a comparator group in a pay equity claim…. Apart from the requirement that a comparator group must constitute an occupational group, and be predominantly of the opposite sex from the complainant group, as defined in section 13, there are no statutory criteria that must be considered in the selection of a comparator. The choice is left to the discretion of [the Canadian Human Rights Commission] and the Tribunal…. I am not persuaded that the Tribunal's choice of comparator group was unreasonable or contrary to the purpose of the Act."

As for the issue of proof, Evans considered that "[i]t is said that the fact that the evidence before the Tribunal was such as to produce 'reasonably reliable job evaluations' is not the same as concluding that on a balance of probabilities the work being compared was of equal value. However, if the evaluation of the jobs was 'reasonably reliable' and a substantial portion of the CR group were performing work at least equal in value to the least valuable PO job, I cannot see what else needs to be proved, or what finding made, in order to establish that the wage comparison related to work of equal value."

Justice Evans concluded that "having found the evidence, methodology, and process to be reasonably reliable, the Tribunal could infer that on a balance of probabilities the jobs had been properly evaluated. Because a substantial portion of the CR jobs fell within the PO value line, a determination could then be made, again on a balance of probabilities, as to whether the CRs were being paid less than the POs for performing work of equal value contrary to section 11…. I am not persuaded that [Canada Post] has rebutted the presumption that the Tribunal applied the standard of proof, a balance of probabilities, which it clearly identified as the applicable standard."

PSAC appealed for leave to appeal to the Supreme Court of Canada. The Supreme Court of Canada granted leave to appeal on December 16, 2010.

Issue(s): (i) What are the appropriate complainant and comparator groups in a pay equity analysis under the Canadian Human Rights Act?; and (ii) what are the evidentiary requirements and standard of proof required to establish work of equal value in a pay equity complaint under the Act?

Supreme Court's Decision (7-0): In a brief oral decision delivered directly from the bench, the Supreme Court of Canada unanimously allowed the appeal, thereby restoring the October 2005 decision of the Canadian Human Rights Tribunal. In her oral reasons given on behalf of the Court, Chief Justice McLachlin simply declared that "we agree with the dissenting reasons of Justice Evans [of the Federal Court of Appeal] which comprehensively address the issues in these appeals." She also announced that the Court had dismissed PSAC's cross-appeal seeking more damages than the original Human Rights Tribunal decision had awarded.

Lancaster Reference: For analysis of the Federal Court of Appeal's decision, see Lancaster's Women/Pay Equity Employment Law eNewsletter, May 18, 2010, Issue No. 40.