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The Women?s Court of Canada: Newfoundland (Treasury Board) v. N.A.P.E., [2006] 1 W.C.R. 327

By Jennifer Koshan

TheCourt.ca is very pleased to reproduce the decisions of the Women?s Court of Canada. In 2004, this group of feminist/equality Charter activists, lawyers, and academics, decided to do something about what they saw as the sorry state of equality jurisprudence under s. 15. Their solution - rewrite the key decisions of the Supreme Court of Canada in this important area. The first six judgments of the Women?s Court of Canada have now been published in Volume 18 of the Canadian Journal of Women and the Law.

Over the coming months TheCourt.ca will have the honour of reproducing these judgments and providing them with a permanent online home. If you scroll down, you will find the logo of the Women?s Court of Canada on the right of your screen. It is hyperlinked. In future, by clicking on that link, readers will be able to view each of the Women?s Court judgments previously published at TheCourt.ca.

In Newfoundland (Treasury Board) v. N.A.P.E. the Women?s Court of Canada reverses the Supreme Court of Canada?s 2004 decision that the erasure of pay equity obligations under Newfoundland and Labrador?s Public Sector Restraint Act was a justifiable violation of women?s equality rights. The Women?s Court finds that a full and substantive account of the equality rights violation under the Canadian Charter of Rights and Freedoms is required in order to provide for a more comprehensive and contextual analysis of the arguments used to justify the infringement of these rights. Examination of the equality issues in N.A.P.E. includes consideration of the history of sex-based wage discrimination and of pay equity as a legal remedy for such discrimination. Against this backdrop, the Women?s Court finds that the erasure of pay equity results in material and symbolic harms and is a clear violation of women?s right to substantive equality. A survey of international law principles on pay equity supports this finding. In considering section 1, the Women?s Court examines the notion of substantive democracy as a counterpart to substantive equality, holding that section 1 of the Charter should be interpreted so as to avoid a conflicting relationship between rights and democracy. The Women?s Court finds that fiscal considerations should never suffice as a pressing and substantial basis for overriding equality rights and, in any event, that the government did not meet its evidentiary burden in proving that a fiscal crisis existed in this case. The government also failed to meet its justificatory burden at the minimal impairment and proportionality stages of the section 1 analysis, a conclusion supported by international law. The Women?s Court decides that the government must comply with its pay equity obligations to the workers represented by NAPE.

Reconsideration of Newfoundland (Treasury Board) v. N.A.P.E., [2004] 3 S.C.R. 381 (judgment of the Supreme Court of Canada reversed).

The decision of the Women?s Court of Canada was delivered by:

JENNIFER KOSHAN

I. Introduction

1. In April 1991, the Newfoundland and Labrador government (referred to throughout as the government) passed wage restraint legislation, the Public Sector Restraint Act (PSRA), S.N. 1991, c. 3 rep. and subs. S.N.L. 1992, c. P-41.1, which imposed cost-cutting measures on the wages of its own employees. One effect of this legislation was to extinguish the government?s obligation to pay $24 million in pay equity adjustments owed to workers in predominantly female bargaining units, who were predominantly women workers. In the government?s own words, ??[e]ssentially what that does is it erases an obligation we had there of approximately $24 million?? [emphasis added] (Newfoundland (Treasury Board) v. N.A.P.E., [2004] 3 S.C.R. 381 (NAPE SCC), Exhibit DC-8, House of Assembly Proceedings, 19 March 1991, Appellant?s Record, Volume IV, at 644-5).

2. The Newfoundland and Labrador Association of Public and Private Employees (NAPE) challenged the government?s legislative action as a violation of the employees? equality rights under section 15(1) of the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act 1982, being Schedule B to the Canada Act, 1982 (U.K.), 1982, c. 11. The courts and Arbitration Board held that the impugned legislative measure did infringe the employees? section 15(1) equality rights. The Arbitration Board also held that the government failed to meet its obligation under section 1 of the Charter to justify this infringement. However, the courts disagreed. From the Newfoundland Supreme Court to the Supreme Court of Canada, the courts held that the infringement was demonstrably justifiable as a reasonable limit on equality rights in a free and democratic society.

3. The Women?s Court of Canada disagrees with the conclusion reached by the courts below. In our opinion, the courts failed to hold the government to account for its decision to erase a substantial portion of its pay equity obligation. The government argued that it was required to make hard choices to address a fiscal deficit and that significantly reducing its pay equity obligations was one of these hard choices. We respectfully disagree. In our opinion, reducing pay equity obligations was a politically more expedient choice for the government than finding a way to fulfil these obligations. It was also a choice that did not comply with the government?s obligations to respect and uphold women?s equality rights under the Charter, even in times of fiscal deficit. Our reasons are set out in the following decision.

II. Factual Context

4. NAPE is a union that represents workers employed by the government. In this case, Newfoundland and Labrador was acting both as government and as employer.

A. Pay Equity Negotiations and Agreement

5. In June 1988, after lengthy negotiations, NAPE and the government reached a pay equity agreement. The agreement opened with an acknowledgment that there was sex-based wage discrimination in the public sector. The stated purpose of the agreement was ??[t]o achieve pay equity by redressing systemic gender discrimination in compensation for work performed by employees in female dominated classes?? (NAPE SCC, Exhibit C-1: Collective Agreement between the NAPE Hospital Support Staff and Her Majesty the Queen in Right of Newfoundland and the Newfoundland and Labrador Health Care Association, Appellant?s Record, vol. IV, at 586).

6. When the pay equity agreement was reached, NAPE and the government did not know the extent of the discrimination and thus did not know the amounts owing in pay equity adjustments. The agreement established a process for identifying the discrimination and then remedying the discrimination once its scope was determined. The agreement also included a five-year, phased-in implementation process for the pay equity adjustments. During the first four years of the implementation period, the government was required to spend up to 1 per cent for each relevant payroll. If a job class did not receive its full pay equity adjustment by the end of the fourth year, the government was obliged to pay the full amount of the remaining adjustment in the fifth and final year of the implementation period.

7. Most of the workers affected by the impugned legislation were in the health care sector, and many were employed as hospital and nursing home support workers. The pay equity implementation date agreed to for these workers was 1 April 1988. By 1 April 1991, the parties had determined that approximately 4,700 workers were owed pay equity adjustments. The government said that these payments represented a cost of approximately $24 million. Under the pay equity agreement, the government was obliged to make the first four pay equity adjustments to the affected employees on 1 April 1991. These four pay equity adjustments were those owing effective 1 April 1988, 1 April 1989, 1 April 1990, and 1 April 1991.

B. The Public Sector Restraint Act and Its Impact

8. The PSRA was passed in April 1991 at the same time as the pay equity job evaluation process for the health care support and hydro workers was being completed.

9. The PSRA imposed restraints on public sector wages in two ways. First, section 5 of the PSRA voided any scheduled increases in pay scales under collective agreements. This form of restraint applied to all of the public sector, including employees in female-dominated jobs who were still being paid discriminatory wages.

10. Second, section 9(1) of the PSRA specifically targeted the pay equity adjustments owed to employees in female-dominated jobs under the pay equity agreement. Section 9(1) was interpreted to void the government?s obligation to make pay equity adjustment payments for any period prior to 1 April 1991. As a result, on 1 April 1991, the affected employees received only the first pay equity adjustment, instead of the first four pay equity adjustments that were due on this date. Thus, these workers never received the pay equity adjustments they were owed on the work they did between 1 April 1988 and 1 April 1991. In addition, the deadline for the government?s obligation to implement pay equity was postponed for three years.

11. The PSRA imposed restraints for a two-year period from 1 April 1991 to 31 March 1993. When the government wanted to continue cost-cutting measures after the end of the legislated restraint period, it reached an agreement with NAPE to take back 1.5 sick days per employee, to reduce the employer?s contribution to the pension plan, and to further extend the pay equity implementation period. Under the renegotiated pay equity implementation agreement, the government was no longer required to pay the full amount of pay equity adjustments owed in the fifth year of the implementation period. Instead, the government was obliged to pay 2 per cent of the payroll per year until the pay equity adjusted rate was fully implemented. Under the extended pay equity implementation period, it took up to ten years for some employees to receive their full pay equity adjustment. Moreover, this renegotiated agreement did not restore the three years of pay equity adjustments for the 1988?91 period that were taken away by the PSRA.

12. Thus, the net effects of the PSRA on workers in the affected female dominated job classes were:

. to freeze their discriminatory wages for the period from 1991 to 1993;

. to erase the government?s obligations to make pay equity adjustment payments on work performed between 1 April 1988 and 1 April 1991; and

. to extend the pay equity implementation period by three years by effectively moving forward the implementation date from 1 April 1988 to 1 April 1991.

III. Judicial History

A. Arbitration Decision (NAPE SCC, Appellant?s Record, Volume I, at 2-137)

13. NAPE challenged the validity of section 9 of the PSRA by way of a grievance under its collective agreement with the government. The Arbitration Board unanimously held that section 9 infringed section 15 of the Charter because it had an adverse impact on women who were already negatively affected by sex-based wage discrimination.

14. A majority of the Arbitration Board also held that the government failed to justify this infringement under section 1 of the Charter. All members of the board agreed that the government had a pressing and substantial need to save money and that there was a rational connection between this objective and section 9 of the PSRA. They disagreed about whether the government had met the proportionality requirement or not.

15. In the view of the majority, the government?s evidence established that further lay-offs were the only alternative to erasing the pay equity obligation that it considered. The majority concluded that there were other alternatives that the government should reasonably have considered. These alternatives included suspending the regular step increases and the reclassification increases that continued during the restraint period. They also included the type of across-the-board cost reduction measures?that is, cutting employees? sick days and reducing the employer?s pension contributions?that were taken after March 1993. Thus, it appeared to the majority that the government?s decision to Vol. 18 2006 331 unilaterally void its pay equity obligations for a three-year period was probably the most rights-infringing measure:

[T]here is more than sufficient evidence in this case to establish that several other less restrictive means were available to government which would have minimized the infringement. In my view, government should not be accorded a measure of deference or flexibility here because it limited its consideration of alternatives to only one option, i.e. 900 layoffs, a choice which was probably the most severe of any that could have been contemplated at the time. Moreover, it is not really clear that government seriously considered layoffs as an option. Indeed, the reference in Hansard to 900 layoffs could be interpreted as an attempt to describe by way of example what would have been the equivalent cost of the pay equity adjustments involved in terms of jobs. Under the circumstances, it is my view that government did not reasonably attempt to minimize the infringement. Rather, it probably chose the most restrictive means available to achieve its objective (NAPE SCC, Appellant?s Record, vol. I, at 102).

16. As a remedy, the Arbitration Board declared that section 9 of the PSRA was void and ordered the government to comply with the provisions of the pay equity agreement as incorporated in the collective agreement.

B. Judicial Review by the Supreme Court of Newfoundland (Trial Division (1998), 162 Nfld. & P.E.I.R. 1)

17. The Supreme Court of Newfoundland, Trial Division, granted the government?s application for judicial review of the Arbitration Board?s decision. The court held that section 9 of the PSRA infringed section 15(1) of the Charter because its effect was to continue the government?s wage discrimination beyond the date when the government was obliged to eliminate this discrimination. However, the court held that the infringement was justified.

18. Justice Keith Mercer was of the view that the Arbitration Board failed to show the appropriate deference to government decision making on fiscal matters when it invoked alternative options that the government did not consider. In his view, government decisions about the expenditure of public funds belong within the government?s control because they ??necessarily involve choices between the claims of various sectors of society?? (NAPE, 332 N.A.P.E. CJWL/RFD Supreme Court of Newfoundland, Trial Division, at para. 88). Mercer J. held that the government fulfilled its justificatory obligation to demonstrate that it had considered reasonable alternatives when it stated that lay-offs were the only alternative.

C. Appeal to the Newfoundland Court of Appeal ((2002), 221 D.L.R. (4th) 513)

19. The Newfoundland Court of Appeal agreed with Mercer J. that section 9 of the PSRA infringed section 15 of the Charter and that this infringement was justified under section 1.

20. On the section 15 question, the Court of Appeal held that the infringement was linked to the government resiling from its commitment to make the pay equity adjustments, stating:

Once Government committed itself to pay equity it could not repeal that undertaking for the duration of the restraint period as it did in s. 9 of the restraint legislation without infringing section 15(1) of the Charter (at para. 339).

The Court of Appeal also agreed with the lower court that the Arbitration Board failed to accord the appropriate deference to the government?s fiscal decision making.

21. Justice William Marshall went even further to pose a more general challenge to the role of the Charter in Canadian constitutional law. In his view, the justificatory burdens that have been imposed on governments by the courts? interpretation of section 1 were contrary to the separation of powers between the courts and the legislatures and should be re-examined. Marshall J.A. proposed that a new test be added for section 1, which would require courts to ask at every stage of the analysis whether the burden imposed on the government was displacing the proper balance between the role of the courts and the role of the legislature.

D. Appeal to the Supreme Court of Canada ([2004] 3 S.C.R. 381)

22. On appeal, the Supreme Court of Canada upheld the conclusion reached by the Newfoundland courts. On the section 15(1) question, Justice Ian Binnie, writing for a unanimous court, applied the framework from Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497. The Court held that section 9 of the PSRA drew a distinction on the basis of sex because it targeted female-dominated classifications and that this distinction imposed substantive discrimination on the basis of the four contextual factors articulated in Law (at paras. 38-51). Vol. 18 2006 333

23. On the section 1 issue, the Supreme Court of Canada affirmed the general principle that governments are required to ??demonstrate?? their justification for limiting a Charter right. Likewise, the Court affirmed in principle the R. v. Oakes, [1986] 1 S.C.R. 103, framework for section 1 justification, thus rejecting Marshall J.A.?s opinion that this framework disturbs the separation of powers between the legislature and the courts (at paras. 104-16). In applying the Oakes framework, however, the Supreme Court of Canada agreed with the conclusion of the lower courts that the government met its section 1 justificatory burden.

24. We elaborate further on the Supreme Court of Canada?s reasons for decision where they pertain directly to our discussion of particular issues.

IV. Issues

25. Does section 9 of the PRSA infringe section 15(1) of the Charter? If so, is the infringement a reasonable limit prescribed by law as can be demonstrably justified in a free and democratic society under section 1 of the Charter?

V. Analysis

A. Section 15 of the Charter

26. The equality rights issue in this case is the constitutional validity of section 9 of the PSRA, which provides as follows:

9. (1) Notwithstanding the terms and conditions of a pay equity agreement contained in a collective agreement or added by agreement to an existing collective agreement, no pay equity agreement shall contain a provision which implements that pay equity agreement retroactively.

(2) Where there is a provision in a pay equity agreement which provides that the pay equity agreement shall be implemented retroactively, that provision is void.

(3) Notwithstanding the other provisions of this Act, a pay equity agreement may be negotiated or implemented, but the 1st pay equity wage adjustment date shall be the date on which the pay equity wage adjustment is agreed upon.

(4) This section applies whether the pay equity agreement is reached or the pay equity wage adjustment date is agreed upon before or after the date this Act comes into force.

(5) In this section ??pay equity agreement?? means an agreement between a public sector employer and a group of public sector employees to recognize the compensation practice which is based primarily on the relative value of the work performed, irrespective of the gender of employees, and includes a requirement that no employer shall establish or maintain a difference between compensation paid to male and female employees, employed by that employer, who are performing work of equal or comparable value.

27. Although the other courts hearing this case all held that the impugned legislative measure infringed section 15(1), they did so with a relative ease that is troubling in view of the similar ease with which they accepted as justifiable the government?s decision to erase its pay equity obligations. In contrast, we undertake a detailed section 15 analysis because we believe that this type of examination of the equality rights issue is critical to properly ground the section 1 analysis. 28. Our discussion of the equality rights issue is divided into three parts. In the first part, we set out our approach to a substantive and contextualized analysis of the application of section 15(1) of the Charter in this case. In the second part, we outline some of the difficulties with the Supreme Court?s approach in Law, supra, in terms of addressing section 15(1) claims generally and in its application to this case. In the third part, we draw on international law principles to support our analysis of section 15(1) of the Charter.

(1) Substantive Equality Framework

29. The text of section 15 of the Charter states:

15. (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

(2) Subsection (1) does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

30. Beginning with the Supreme Court of Canada?s decision in Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143 at 164-71 (per Justice William McIntyre), Canadian courts have rejected an abstract and formalistic approach to equality rights in favour of a contextual and substantive approach.

31. In Andrews, the Supreme Court of Canada posed two questions for a substantive approach to equality rights under the Charter: (1) is there a distinction in treatment; and (2) is this distinction discriminatory? In the Andrews framework, the question of whether the distinction is based on a prohibited or analogous ground was part of the answer to the question of whether the distinction is discriminatory.

32. A fundamental principle of a substantive equality approach is that the focus should be on the effects of the differential treatment or action. Moreover, these effects must be looked at not simply by themselves but also in their historical, social, political, and legal context (Andrews, at 152, 164-9, 174-5, and 180-1; Eldridge v. British Columbia (Attorney General), [1997] 3 S.C.R. 624 at paras. 60-1, 64-9, and 77; Law, at paras. 39, 42-3, 51, 54-5, 64-5, 70, and 85-6).

33. The pay equity agreement between NAPE and the government was reached in a context where discrimination is legally recognized as a significant cause of the gap between women?s wages and men?s wages and pay equity is recognized as a legal remedy for sex-based wage discrimination. A contextual analysis of the pay equity agreement between NAPE and the government and of the effects of section 9 of the PSRA is therefore necessary to the section 15 analysis in this case.

(a) Social Context of the Pay Equity Agreement

34. The principle of ??equal remuneration for work of equal value?? was one of the founding principles of the International Labour Organization, which was established in 1919 (Constitution of the International Labour Organization, Part XIII, Versailles Treaty, 28 June 1919, Article 427). This principle recognizes that the economic value of work is not inherent to the job or to the person doing the job. Economic value is socially defined and ascribed. In unionized workplaces, the union and the employer negotiate this value. In non-unionized workplaces, employers may negotiate this value with employees, or they may determine it unilaterally.

35. In 2004, almost one century after the principle of pay equity was introduced, the Federal Task Force on Pay Equity reported that the wage gap between women and men in industrialized countries continued to hover around 25 per cent. For Canada, the task force reported that women?s average employment income in the year 2000 was 70.8 per cent of men?s average income (Pay Equity: A New Approach to a Fundamental Right (Ottawa: Pay Equity Task Force, 2004) at 10 and 12). This wage gap affects women as a group and tends to be even more pronounced for Aboriginal women, women with disabilities, poor women, and racialized women (Pay Equity, at 41; and Pat Armstrong and Hugh Armstrong, The Double Ghetto: Canadian Women and Their Segregated Work, 3rd edition (Toronto: McClelland and Stewart, 1994) at 45-9).

36. In the Canadian labour market, as in other labour markets, women tend to be clustered in jobs that are less well paid than the jobs in which men predominate. The term ??occupational segregation?? is often used to refer to the fact that women and men tend to perform different types of work in the labour force. Statistics for Canada for 2002 indicated that 70 per cent of all female workers in Canada worked in the areas of teaching, nursing, and related health occupations, clerical or other administrative positions, and sales and service occupations (Pay Equity, at 14-15, citing Statistics Canada, Women in Canada: Work Chapter Updates (Ottawa: Statistics Canada, 2003) at 8-9). Occupational segregation, like economic value, is the result of social practices. Many different social practices combine to produce workplaces in which women and men do different jobs.

37. Occupational segregation, and the compensation practices that are associated with it, are significant contributing factors to the sex-based wage gap. As Pat Armstrong and Hugh Armstrong have written, ??[o]bviously there are not only men?s jobs and women?s jobs, but also men?s wages and women?s wages.?? They go on to say:

In summary, wage differentials go hand in hand with occupational segregation. As Fox and Fox . . . conclude, ??women systematically have been kept out of occupations in which men?s wages are high.?? But the other half of the coin is that women?s jobs have been systematically underpaid relative to those of men (Armstrong and Armstrong, supra, at 45, citing Bonnie Fox and John Fox, ??Women in the Labour Market, 1931-1981: Exclusion and Competition?? (1986) 23 Canadian Review of Sociology and Anthropology 1 at 15).

38. Women as workers, and the jobs women do, tend to be ascribed second-class status in the labour force. As the Women?s Legal Education and Action Fund (LEAF) argued in its factum before the Supreme Court of Canada, women?s labour market subordination has been normalized through practices ??that stereotype and marginalize women and their work?? (NAPE SCC, factum of the intervenor LEAF, at para. 29, reprinted in Fay Faraday, Margaret Denike, and M. Kate Stephenson, Making Equality Rights Real: Seeking Substantive Equality under the Charter (Toronto: Irwin Law, 2006) 471 at 476-7)). Women have commonly been assumed not to be ??breadwinners?? but merely working for ??pin money.?? Their work has been assumed not to involve the exercise of skill and expertise but, rather, to involve ??natural?? sex-specific traits that have been deemed to be of little value. Occupational segregation has been ascribed to women?s choices rather than to workplace barriers. Women have been assumed to be selfless and unambitious (Nan Weiner and Morley Gunderson, Pay Equity: Issues, Options and Experiences (Markham, ON: Butterworths Canada, 1990) at 5-16; see also Pay Equity, supra, at 25-8; Judge Rosalie Silberman Abella, Report of the Royal Commission on Equality in Employment (Ottawa: Ministry of Supply and Services, 1984) at 245-9).

39. Wage discrimination has direct material consequences for women. Simply put, they do not earn as much money as men. This inequality has also compounded other employment inequalities that women experience. It has done so largely by reinforcing second-class status for women in the workplace. This second-class status, in turn, has been reflected in, and has reinforced, other systems and practices of sex inequality in employment, including insufficient provision for childcare and other family care responsibilities, parttime employment, precarious employment, and sexual harassment. Women experience these employment inequalities in different ways, depending upon their social class, race, and abilities (See Leah F. Vosko, Temporary Work: The Gendered Rise of a Precarious Employment Relationship (Toronto: University of Toronto Press, 2000) at 3-13 and 27-44; see also Judy Fudge and Rosemary Owens, eds., Precarious Work, Women and the New Economy: The Challenge to Legal Norms (Oxford: Hart Publishing, 2006); Ann Porter, Gendered States: Women, Unemployment Insurance and the Political Economy of the Welfare State in Canada 1945-1997 (Toronto: University of Toronto Press, 2003); and Cynthia Cranford, Leah Vosko, and Nancy Zukewich, ??The Gender of Precarious Employment in Canada?? (2003) 58 Relations industrielles/ Industrial Relations 454).

(b) Legal Responses to Sex-Based Wage Discrimination

40. The principle of ??equal remuneration for work of equal value?? calls for an examination of the compensation practices associated with the jobs women do and the second-class status ascribed to women?s jobs and women?s work. This principle was enshrined in 1951 in the International Labour Organization?s (ILO) Convention no. 100 Concerning Equal Remuneration for Men and Women for Work of Equal Value, General Conference, 34th Sess. (Equal Remuneration Convention) and has since been incorporated into the International Covenant on Economic, Social and Cultural Rights, 16 December 1966, 993 U.N.T.S. 3, Article 7; the Convention on the Elimination of All Forms of Discrimination against Women, 18 December 1979, 1249 R.T.N.U. 13, adopted by the UN General Assembly Resolution 34/180, Article 11; and the Beijing Declaration and Platform for Action, UN Doc. A/CONF.177/20 (1995) and UN Doc. A/CONF.177/20/Add.1 (1995), Article 167. Canada has ratified all of these conventions and has signed the Beijing Declaration.

41. In Canada, legal remedies for sex-based wage discrimination have generally taken two forms. Equal pay laws are one form of remedy. These laws are designed to address the direct discrimination that occurs when women are paid less than men for doing the same work or substantially similar work. First passed by provincial legislatures in the 1950s and 1960s, these legal provisions were often later incorporated into human rights statutes or employment standards statutes (in Ontario, for example, see Female Employee?s Fair Remuneration Act, S.O. 1951, c. 26; Ontario Human Rights Code, S.O. 1961-2, c. 93, s. 5; and Employment Standards Act, S.O. 1968, c. 35, s. 19). The equal pay remedy can be used where there is a relatively obvious comparison between women?s work and men?s work, but it is not available where there is no such obvious comparison to make.

42. Pay equity laws are a second form of legal remedy. The expression ??pay equity?? is linked with the legal remedy for non-explicit and systemic sexbased wage discrimination. The pay equity legal remedy typically requires that a gender-neutral job evaluation process be conducted to find a way of comparing women?s work with men?s work and of determining whether women?s work is under-valued and underpaid relative to men?s work. This process typically evaluates the work in terms of skill, effort, responsibility, and working conditions. An important goal is to attach value to the aspects of the job that are often discounted when economic value is assigned to women?s paid work. If the job evaluation process shows that women are paid less for doing work that is relatively equal in skill, effort, responsibility, and working conditions to men?s work, then women are entitled to have their wages equalized with the wages of the male comparator (for discussion of the legislated approaches to pay equity, see Pay Equity, supra, at 63-76).

43. In Canadian law, pay equity is conceptually and legally a human rights remedy for sex-based wage discrimination. Pay equity is considered a ??human right?? because it requires an examination of the impact of existing systems and practices and a re-evaluation of the value of women?s work in relation to men?s work. Pay equity legal remedies are designed to challenge labour market inequities and to provide a measure of redress for sex-based wage discrimination by moving towards equalizing the wages paid for women?s work in relation to wages paid for men?s work. As the Federal Pay Equity Task Force stated in its 2004 final report:

At the heart of the principle of equal pay for equal value is a concern with systemic discrimination, and with pay practices which have routinely overlooked or devalued important aspects of the work done by women. We think that the elimination of discrimination should be the central focus of pay equity legislation, and consequently that it should be characterized as human rights legislation (Pay Equity, at 150).

However, while pay equity remedies can challenge some labour market inequities and can provide a measure of redress for sex-based wage discrimination, they are not a solution to all of the problems of unequal wages, let alone all of the problems of discrimination against women in employment (see Judy Fudge and Patricia McDermott, eds., Just Wages: A Feminist Assessment of Pay Equity (Toronto: University of Toronto Press, 1991); Judy Fudge, ??The Paradoxes of Pay Equity: Reflections on the Law and the Market in Canada and the PSAC?? (2000) 12 Canadian Journal of Women and the Law 313-45; Ceta Ramkhalawansingh, ??Employment Standards Legislation: A Primary Source of Women?s Employment Inequality?? (1993) 2 Canadian Labour and Employment Law Journal 80-9; see also Pay Equity, Recommendations 6.9 and 6.10). The latter recommendations of the Federal Pay Equity Task Force recommend that pay equity legal obligations be expanded to apply to wage discrimination in relation to disability, visible minority status, and Aboriginal status.

44. The Supreme Court of Canada introduced its discussion of the legal issues in this case by stating: ??Pay equity has been one of the most difficult and controversial workplace issues of our times?? (NAPE SCC, at para. 30 [emphasis added]). The Court did not explain what it meant when it said that pay equity is a ??difficult?? and ??controversial?? issue. We believe that this statement reflects the fact that pay equity questions the legitimacy of compensation practices that produce relatively higher wages for men. Pay equity challenges the idea that compensation practices that systemically produce lower wages for women?s work are normal or natural. This challenge may be ??difficult?? and ??controversial.?? However, the effectiveness of equality rights would be significantly diminished if they did not require engaging with difficult and controversial issues.

45. Human and equality rights principles require us to examine social practices and systems from different perspectives and, in particular, from the perspective of groups who do not benefit equally from them. As Justice John Evans of the Federal Court wrote in Canada (Attorney General) v. Public Service Alliance of Canada, [2000] 1 F.C. 146 at paras. 117 and 151,

[T]he policy motivating the enactment of the principle of equal pay for work of equal value is the elimination from the workplace of sex-based wage discrimination. The kind of discrimination at issue here is systemic in 340 N.A.P.E. CJWL/RFD nature: that is, it is the result of the application over time of wage policies and practices that have tended either to ignore, or to undervalue work typically performed by women . . .

[T]he nature of systemic discrimination often makes it difficult to prove that the disadvantaged position in the workplace of many members of particular groups is based on the attributes associated with the groups to which they belong. This is because, as Dickson C.J. observed in Canadian National Railway Co., supra, at page 1139, systemic discrimination ??results from the simple operation of established procedures of recruitment, hiring and promotion, none of which is necessarily designed to promote discrimination.?? Accordingly, an employer?s wage policies and practices may be based on such deep-rooted social norms and assumptions about the value of the work performed by women that it would be extremely difficult to establish in a forensic setting that, if women were paid less than men performing work of equal value, that difference was based on sex.

46. As the Supreme Court of Canada held in British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3 at para. 41, a substantive approach to discrimination calls for the transformation of systems and practices that have discriminatory impact:

Under the conventional analysis, if a standard is classified as being ??neutral?? at the threshold stage of the inquiry, its legitimacy is never questioned. The focus shifts to whether the individual claimant can be accommodated, and the formal standard itself always remains intact. The conventional analysis thus shifts attention away from the substantive norms underlying the standard, to how ??different?? individuals can fit into the ??mainstream,?? represented by the standard . . . Referring to the distinction that the conventional analysis draws between the accepted neutral standard and the duty to accommodate those who are adversely affected by it. Shelagh Day and Gwen Brodsky [??The Duty to Accommodate: Who Will Benefit??? (1996) 75 Canadian Bar Review 433], supra, write:

The difficulty with this paradigm is that it does not challenge the imbalances of power, or the discourses of   dominance, such as racism, ablebodyism and sexism, which result in a society being designed well for some and not for others . . .

As a formula, different treatment for ??different?? people is merely the flip side of like treatment for likes. Accommodation does not go to the heart of the equality question, to the goal of transformation, to an examination of the way institutions and relations must be changed in order to make them available, accessible, meaningful and rewarding for the many diverse groups of which our society is composed [at 462].

I agree with the thrust of these observations. Interpreting human rights legislation primarily in terms of formal equality undermines its promise of substantive equality and prevents consideration of the effects of systemic discrimination, as this Court acknowledged in Action Travail [Canadian National Railway Co. v. Canada (Canadian Human Rights Commission), [1987] 1 S.C.R. 1114], supra at paras. 40-1).

A substantive approach to equality rights under section 15 of the Charter similarly calls for the transformation of discriminatory systems and practices.

(c) Section 15 of the Charter and the Effects of Section 9 of the PSRA

47. In the government?s own words, section 9 of the PSRA erased three years of pay equity adjustments owed to women workers in the public service. From the perspective of the affected workers, and as articulated by LEAF, section 9 imposed a ??disproportionate burden?? of the government?s deficit reduction measures on women workers, who were subjected both to a general wage freeze affecting all public sector employees and to a claw-back of their pay equity payments (NAPE SCC, LEAF factum, at para. 39).

48. By erasing the government?s pay equity obligations from 1988 to 1991, section 9 revoked the compensatory redress owed to women workers for work done during the three years prior to the restraint period. Section 9 also forced women workers to wait three more years to begin to achieve wages equal to men?s wages. The courts below framed section 9 as a temporary measure that only delayed or postponed the implementation of the pay equity agreement. In our opinion, these efforts at minimizing the effect of section 9 are misguided and incorrect.

49. Section 9 was not a temporary measure. The affected employees lost forever the pay equity adjustments they were owed on work done between 1 April 1988 and 1 April 1991. They also lost forever the cumulative benefits that would have flowed from receiving the four pay equity adjustments they were entitled to receive on 1 April 1991, only one of which was actually received. This erasure additionally affected older workers and workers with disabilities who began to receive pensions or income replacement benefits between 1 April 1988 and 1 April 1991, since these benefits were permanently calculated upon their discriminatory wages.

50. Section 9 did not simply delay the implementation of the pay equity agreement. It permanently extinguished a significant portion of the government?s legal obligations.

51. As argued by LEAF, when the government?s fiscal health is subsidized by sex-based wage discrimination within its own workforce, economic and social inequalities continue to be imposed on women (NAPE SCC, LEAF factum, at para. 32). These burdens impose material inequalities that infringe section 15 of the Charter. The message that accompanies these burdens is that the government can avoid its responsibility for women?s social and economic inequalities. This message also infringes section 15 of the Charter.

52. A government witness in the grievance arbitration proceeding, Gerald Maloney, testified that the initiative taken by the government in 1993 to further extend the pay equity implementation period was driven in part by the perceived inequity of some employees receiving more than others during a period of ongoing fiscal restraint. In his words,

[t]he net . . . effect of that . . . was to, rather than make the final pay equity adjustment in that fifth year of 1995, it was to spread out the pay equity process over another four or five year period and gradually build up to the achievement of full pay equity. But it was driven by, by those two primary considerations, one being the difficulty we had with absorbing a $12 million expenditure at one time, and the second, the inequity, I guess, that we felt it was creating by giving one group a fairly substantial pay raise when there was another group, or most of the rest of the public sector, who were not going to get anything (NAPE SCC, Appellant?s Record, vol. III, at 548-49 [emphasis added]).

Maloney also suggested that section 9 of the PSRA was motivated by a similar concern that it would not be fair to provide pay equity adjustments when employee compensation packages were frozen:

The state of affairs we were faced with when we renegotiated this in 1994 was not unlike the state of affairs we were facing in 1991 whereby again to implement pay equity in 1991 as agreed to would have required us to make a very substantial retroactive payment in addition to increasing our salary bill in that year and would again have had the effect of giving one group of workers very substantial increases and very substantial retroactive cheques during a period when we were looking at most of the public sector saying, you can?t have anything (NAPE SCC, Appellant?s Record, vol. III, at 549 [emphasis added]).

53. The suggestion that it would have been unfair to make pay equity adjustment payments in a context where employees were not receiving wage increases reflects a fundamental misunderstanding of the purpose of pay equity adjustments. Pay equity adjustments are not a wage increase. They are a monetary adjustment that is required to remove discrimination in wages. As the majority of the Arbitration Board observed, this was far from being a situation in which the pay equity adjustments could be treated as an ??increase?? that might create morale problems among other workers. On the contrary, eliminating the pay equity adjustments had a ??double demoralizing effect?? on the women workers who were subject to the across-the-board wage freeze as well as to the confiscation of their pay equity adjustment (NAPE SCC, Appellant?s Record, vol. I, at 104). When the government and the courts characterize a pay equity obligation as a pay ??increase,?? as though it were a discretionary matter rather than a human rights entitlement, they reinforce the idea that women?s equality is a ??frivolous luxury that must give way to other government objectives?? (NAPE SCC, LEAF factum, at para. 36). The message communicated is that wage equality for women is not affordable for society.

54. In the public sector context, the under-valuation of women?s work results in the costs of government being subsidized in part by women workers. It appears to us that the government and the courts perpetuated the very discrimination that pay equity legal remedies are designed to remedy when they sought to minimize the effect of section 9 of the PSRA. Treating the negotiated pay equity adjustments not as an entitlement but rather as government largesse undermines the transformative goal of pay equity, which is to recognize the true value of women?s work and compensate it accordingly.

55. Even though the courts below consistently held that section 9 of the PSRA infringed section 15(1) of the Charter, their reasons for this decision say very little about sex-based wage discrimination and about pay equity as a legal remedy for this discrimination. In our view, their approaches to section 15(1) can only be described as minimalist. This minimalism glossed over the challenges posed by pay equity and is reflected in the Supreme Court of Canada?s statement that pay equity is ??difficult?? and ??controversial.??  In our view, these unexamined challenges contributed to a flawed analysis of what the government did when it erased three years of its pay equity obligation to women workers and what other measures the government could and should have considered. We believe that the ease with which the lower courts accepted the government?s section 1 argument stems from the want of a full and substantive account of why reneging on its pay equity obligation violated section 15.

(2) The Law Framework and its Application in This Case

56. Canadian courts have never formally rejected the substantive approach to equality first articulated by the Supreme Court of Canada in Andrews, supra. However, they have increasingly disagreed about what a substantive approach to equality means in the context of addressing the concrete claims brought under section 15 of the Charter.

57. In Law, supra, the Supreme Court of Canada re-articulated the legal framework for a substantive equality analysis. This re-articulation built on both the Andrews principles as well as the Court?s subsequent jurisprudence (see, for example, Brooks v. Canada Safeway Ltd., [1989] 1 S.C.R. 1219; Weatherall v. Canada (Attorney General), [1993] 2 S.C.R. 872; Miron v. Trudel, [1995] 2 S.C.R. 418; and Eldridge, supra).

58. The Law approach divided the two Andrews questions into three questions, which are: (1) is there a distinction in purpose or effect of the law; (2) is the distinction based on a prohibited or analogous ground of discrimination; and (3) is the distinction discriminatory in a ??substantive?? sense (at para. 39)? It then further divided the third question into what the Court called four contextual factors, which are: (1) is there historical or preexisting disadvantage, stereotyping, prejudice, or vulnerability experienced by the individual claimant or group; (2) does the ground on which the claim is based correspond to the actual need, capacity, or circumstances of the claimant or others; (3) does the legislation have an ameliorative purpose or effect for a historically disadvantaged group; and (4) what is the nature and scope of the interest affected by the impugned law (at paras. 62-75)?

59. The Supreme Court of Canada emphasized that these four contextual factors were not intended to be comprehensive nor were they intended to be applied formulaically. However, as noted by LEAF, a number of commentators have expressed concerns that this is precisely what has happened in the jurisprudence since Law (NAPE SCC, LEAF factum, at paras. 20-4). Critics have suggested that the Law approach has become a mechanically applied checklist instead of a meaningful contextual guide and that it disaggregates and disconnects the contextual factors instead of showing how they are related. They have expressed concerns that the Law framework has the effect of reintroducing an abstract and rationalizing formalism into the equality analysis, instead of providing a meaningful guide to a substantive approach to equality (NAPE SCC, LEAF factum, supra; Fay Faraday, Margaret Denike, and M. Kate Stephenson, ??Introduction: In Pursuit of Substantive Equality,?? in Making Equality Rights Real, supra, at 9-26; Beverley Baines, ??Law v. Canada: Formatting Equality?? (2000) 11(3) Constitutional Forum 65; Sheilah Martin, ??Balancing Individual Rights to Equality and Social Goals?? (2001) 80 Canadian Bar Review 299; June Ross, ??A Flawed Synthesis of the Law?? (2000) 11(3) Constitutional Forum 74; Bruce Ryder et al., ??What?s Law Good For? An Empirical Overview of Charter Equality Rights Decisions?? (2004) 24 Supreme Court Law Review 103; and Sheila McIntyre and Sanda Rogers, eds., Diminishing Returns: Inequality and the Canadian Charter of Rights and Freedoms (Markham, ON: LexisNexis, 2006)).

60. Commentators have also expressed concerns that the Law framework distorts or under-analyzes the role of dignity in equality rights analysis by separating dignity from the concrete harms and underlying values that mark substantive discrimination (see Martin, supra; Sophia R. Moreau, ??The Wrongs of Unequal Treatment?? (2004) 54 University of Toronto Law Journal 291; and Denise Reaume, ??Discrimination and Dignity,?? in Making Equality Rights Real, supra, 123). These concrete harms have been identified by the Supreme Court as the harms that flow from devaluation, stigmatization, political, and social prejudice, stereotyping, lacking political power, exclusion, marginalization, historical disadvantage, social, political, and legal disadvantage, vulnerability, oppression, and powerlessness (Law, at paras. 29, 34, 39, 42, 43, 44, 46, 47, 53, 63, and 64, as cited in NAPE SCC, LEAF factum, at para. 17).

61. In our view, dignity can be relevant to a substantive equality analysis as a social value that is undermined by the concrete, material harms of discrimination. It is the latter, however, that should be the focus of section 15. These material harms are seen in the social, political, legal, and economic inequalities that are produced by practices of subordination, devaluation, disenfranchisement, and disempowerment. These inequalities include the denial of equal inclusion and participation in society, the denial of equal recognition as citizens, the denial of equal enjoyment of social and economic resources, and the denial of equal autonomy as human beings (NAPE SCC, LEAF factum, at para. 23; Martin, supra; and Colleen Sheppard, ??Inclusive Equality and New Forms of Social Governance?? (2004) 24 Supreme Court Law Review 45 at 71-3).

62. By following the Law approach to conclude that section 9 of the PSRA infringed section 15, the Supreme Court of Canada?s analysis is characterized by a detachment and a mechanistic application of the contextual factors that demonstrate how the disaggregation of the factors can de-emphasize the harms of discrimination. This approach risks effacing the equality violation. In this case, the cursory and disconnected nature of the Supreme Court?s section 15 analysis failed to provide the Court with a properly contextualized examination of the harm to the women workers to incorporate within its section 1 analysis.

63. In applying the four factors, the Court held that: (1) there was preexisting disadvantage because there was a long and chronic history of women?s jobs being underpaid and that section 9 reinforced this disadvantage by taking away remedial benefits negotiated to address the under-valuation of women?s work; (2) delaying payment of the pay equity adjustments not only failed to correspond to the actual needs of the claimants but in fact undermined their needs; (3) section 9 did not have an ameliorative purpose in relation to the workforce but, indeed, had the opposite purpose; and (4) the interest affected was of great importance because of the importance of work in peoples? lives (NAPE SCC, at paras. 41-51).

64. In principle, the purpose of the four contextual factors is to determine whether or not the differential treatment imposes substantive discrimination. By dividing the analysis into four distinct questions, however, the Supreme Court seems to be distracted from providing an answer to the central question. The answers to the four contextual factors do not appear to add up to a single answer to the question of substantive discrimination; they remain four discrete and disconnected answers. This disaggregated approach masks the seriousness of the harms of discrimination.

65. To conclude, section 9 of the PSRA produced substantive discrimination by perpetuating the material and symbolic devaluation of women?s work. It did so by imposing on women a disproportionate share of the government?s fiscal reduction measures. The effect of this action is to perpetuate stereotypes of women?s work as marginal and second class, to continue women?s economic and social disadvantage, and to deny women workers equal recognition and equal treatment. It is these concrete harms for which the government must account.

(3) International Law Principles

66. As noted earlier, international law also supports the conclusion that section 9 of the PSRA infringes section 15 of the Charter. International pay equity norms are binding, as the relevant treaties have been ratified by Canada, and it is presumed that Canadian legislators intend to act consistently with their international obligations. As such, international pay equity norms must be applied when considering whether section 9 of the PSRA violates section 15 of the Charter, unless these norms are inconsistent with Canadian law (see Gibran van Ert, Using International Law in Canadian Courts (The Hague: Kluwer Law International, 2002) at 271-2). In the context of this case, the question is whether international pay equity norms are consistent with substantive equality as protected under Canadian law. Given our conclusion that pay equity is consistent with women?s substantive equality and, indeed, remedies systemic wage inequality for women workers, this is an appropriate case in which to apply international norms to the interpretation of section 15 of the Charter in the context of the PSRA.

67. Several sources of international law provide for a right to pay equity for women. The International Covenant on Economic, Social and Cultural Rights provides in Article 7(a)(i) for ??the right of everyone to the enjoyment of just and favourable conditions of work,?? including ??[f]air wages and equal remuneration for work of equal value without distinction of any kind, in particular women [are] guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work.??

68. Article 11(1)(d) of the Convention on the Elimination of All Forms of Discrimination against Women, supra, guarantees women ??the right to equal remuneration, including benefits, and to equal treatment in respect of work of equal value, as well as equality of treatment in the evaluation of the quality of work.??

69. Similarly, Article 167(a) of the Beijing Declaration and Platform for Action, supra, requires that governments ??enact and enforce legislation to guarantee the rights of women and men to equal pay for equal work or work of equal value?? (see also Articles 168(1), 180(a), 180(h), 180(1), and 180(o)). The International Labour Organization has also recognized the principle of pay equity in the Equal Remuneration Convention, supra, and in its Declaration of Fundamental Principles and Rights at Work, 86th Sess. (June 1998).

70. International law also provides a right of equal pay for workers of colour and workers with disabilities. Article 5(e)(i) of the International Convention on the Elimination of All Forms of Racial Discrimination, 660 U.N.T.S. 195, 4 January 1969, requires states parties ??to prohibit and to eliminate racial discrimination in all its forms?? and to guarantee the right of racial equality in the enjoyment of economic, social, and cultural rights, including ??the rights to work, to free choice of employment, to just and favourable conditions of work, to protection against unemployment, to equal pay for equal work, [and] to just and favourable remuneration.?? Canada ratified the International Convention on the Elimination of All Forms of Racial Discrimination on 15 November 1970. Article 27 of the draft Convention on the Rights of Persons with Disabilities, UN Doc. A/AC.265/2006/L.6 (2006), provides for ??the rights of persons with disabilities, on an equal basis with others, to just and favourable conditions of work, including equal opportunities and equal remuneration for work of equal value.??

71. Section 9 of the PSRA, which extinguished the government?s pay equity obligations in relation to workers covered by the pay equity agreement, must be viewed as contrary to these international pay equity norms. The effect of section 9 is that women?s right to be paid equally for work of equal value was erased, with material and symbolic harms for women. International law thus confirms that section 9 of the PSRA is contrary to the guarantee of substantive sex equality in section 15 of the Charter. To put this another way, an interpretation of section 15 that found otherwise would be inconsistent with international law.

(4) The Government?s Actions Must Be Demonstrably Justified

72. For all of these reasons, we conclude that the government infringed the substantive equality rights of its women workers by enacting section 9 of the PSRA, and is required to demonstrate that this infringement is a reasonable limit in a free and democratic society.

B. Section 1 of the Charter

(1) General Principles

73. In addressing the section 1 inquiry, it is critical to begin with the language of the provision itself: ??The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.?? Although criteria have been developed to assist courts in conducting this inquiry, as we will discuss later in this decision, the Supreme Court of Canada confirmed in RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, that the applicable test for section 1 is dictated by the language of the section itself (at para. 62 (per Justice Gerard La Forest, dissenting on other grounds) and at para.126 (per Justice Beverley McLachlin (as she then was)).

74. While the courts have come to treat section 1 as a ??defence?? for government infringements of Charter rights and freedoms, we must remember that section 1 is designed to protect such rights and freedoms by permitting only those violations that can be demonstrably justified as reasonable limits in a free and democratic society. As noted by Chief Justice Brian Dickson in R. v. Oakes, [1986] 1 S.C.R. 103 at 135-6:

It is important to observe at the outset that s. 1 has two functions: first, it constitutionally guarantees the rights and freedoms set out in the provisions which follow; and, second, it states explicitly the exclusive justificatory criteria (outside of s. 33 of the Constitution Act, 1982) against which limitations on those rights and freedoms must be measured. Accordingly, any s. 1 inquiry must be premised on an understanding that the impugned limit violates constitutional rights and freedoms?rights and freedoms which are part of the supreme law of Canada.  As Wilson J. stated in Singh v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177 at p. 218: ??. . . it is important to remember that the courts are conducting this inquiry in light of a commitment to uphold the rights and freedoms set out in the other sections of the Charter.??

75. This section of the judgment will outline the general principles that govern inquiries under section 1 of the Charter. These principles include substantive democracy, government burden, and context, each of which will be considered in turn. Following the discussion of general principles, we will outline the framework and factors to be used for the section 1 analysis and apply these criteri

Full post as published by The Court on February 11, 2010 (boomark / email).