Law in Quebec

“The decision is a step in the right direction, and sets the record straight on how employers can deal with pay equity maintenance,” remarked Pierre Brun, a Montreal labour lawyer with Melançon Marceau Grenier Cohen. “One cannot set up a system that will not correct wage discrimination. It must respect the purpose and the spirit of the law.”

The ruling will likely have a sizeable impact as it stresses that pay equity audits are an integral part of Quebec’s pay equity law, noted Montreal labour lawyer Catherine Sauvé. Employers and Quebec’s workplace safety board (CNESST), the provincial body entrusted with enforcing pay equity legislation, have long had a tendency to view pay equity audits as a less demanding exercise that was disembodied from the Pay Equity Act, added Sauvé.

“This is the first judgment that really delves into the application of the law regarding pay equity maintenance,” said Sauvé, a lawyer with Laroche Martin, an arm of the Central Labour Union (CSN), who successfully pled the case. “Employers, and even the CNESST, have read and applied pay equity legislation in silos. This decision however clearly states that the principles behind pay equity legislation equally apply to pay equity maintenance.”

Pay equity legislation, in place in Quebec since 1996, compels employers with 10 or more workers to conduct a a complex, rigorous and time-consuming exercise to establish a pay equity plan or make needed adjustments to close wage gaps between female-dominated job classes and male-dominated job classes.

On top of that, following a Supreme Court of Canada ruling in Quebec (Attorney General) v. Alliance du personnel professionnel et technique de la santé et des services sociaux, 2018 SCC 17, [2018] 1 S.C.R. 464, which found that Quebec’s pay equity law violated women’s equality rights, the Quebec government introduced in 2019 legislation that required employers with 10 or more employees to perform a pay equity audit (also referred to as pay equity maintenance) every five years.

Pay equity maintenance not defined by in the law

The law, point out labour lawyers, includes an obligation to maintain pay equity but does not define what it means. Under the law, employers have the choice of conducting the exercise on its own, in committee or jointly with a certified association, and must post the results of its work. To comply with the SCC ruling, the 2019 amendments stipulate that any salary adjustment is due as the date of the “event” leading to the adjustment.

But the law is also “very vague” over the processes and procedures to be used in pay equity audits, noted labour lawyers. Nor does it not stipulate the method employers should use to conduct pay equity maintenance assessment. In fact, according to the CNESST, the Pay Equity Act does not impose any specific conditions for assessing the maintenance of pay equity.

Employers use a variety of ways to calculate the differences in pay in work of equal or comparable value. The most widely used technique is job-to-line, also referred to as the proportional value method, and it compares female job classes by looking at the compensation and value of the work performed by predominantly female job classes to predominantly male job classes within the same establishment. Another method is line-to-line or the wage line approach, which compares the wage line of all female job classes with the wage line of all male job classes within an organization, usually through regression analysis.

But using line-to-line, while offering a lower cost solution to employers, does not provide for a “real correction” of the discrimination suffered by law, held adjudicator François Beaubien in a 32 page decision in 2024 QCTAT 1328.

“The Tribunal finds that in all cases, either the ‘line to line’ method is useless or it produces inconsistent results that make it impossible to correct pay discrepancies in accordance with the Act” when compared to the job-to-line used during the initial pay equity exercise using the same data, said Beaubien. “The Tribunal therefore concludes that the ‘line to line’ method is inapplicable in a pay equity maintenance exercise.”

The case deals with the City of Rimouski and Héma-Québec, a non-profit organization supplied blood. In two separate decisions, the majority of the CNESST Pay Equity Commission ruled that line-to-line method used by both organizations to conduct a pay equity audit was valid and consistent with the application of the Quebec law. The decisions were successfully contested by the CSN.

Both employers argued that since the Pay Equity Act does not explicitly provide references on how to conduct audits, it is less a exacting process than the initial pay exercise. As a result, employers could use methods other than those specifically provided for in the legislation when they conduct the initial pay equity plan.

But adjudicator Beaubien dismissed those arguments. He held that “achieving pay equity would be meaningless or impossible without” taking into account provisions already contained in the Pay Equity Act such as the definition of a job category, the evaluation of sexual predominance, and a method for comparing predominantly female job classes to predominantly male job classes in order to estimate wage differentials.

The decision however does not stipulate the method that should be used by employers to conduct pay audits. “It wasn’t the adjudicator’s role to determine the right way to do it,” noted Brun. “Now, there’s still plenty of room for discussion because we need to evaluate jobs to find out whether they’re equivalent or not. We’re comparing what with what. There’s still plenty of room for manoeuvre for employers. But employers cannot use the line-to-line method. But they have to be careful with the methods they use” because it must still respect the purpose and spirit of the law.

The decision is widely expected to be the subject of a judicial review before Quebec Superior Court. But if the ruling is upheld, Sauvé maintains that it will have an impact on all pay equity audits in Quebec.

“It’s a matter of public policy,” said Sauvé. “The line-to-line method cannot be used. Even audits that were previously done with this method are null and void. We could go back over the maintenance exercises that were carried out using this method. It has a big impact.”

Brun believes that if Superior Court upholds the decision, then “it will have a broader scope, and even more so if it goes to the Quebec Court of Appeal.”

Counsel for both employers declined to comment.