The Supreme Court Rules Pay Equity Legislation Must Allow For Retroactive, Non-Onerous Remedial Avenues For Women

The Supreme Court of Canada has released its much-anticipated decision in Quebec (Attorney General) v Alliance du personnel professionnel et technique de la santé et des services sociaux1. The majority clearly stated that while a freestanding positive obligation to implement pay equity legislation is not required by subsection 15(1) of the Canadian Charter of Rights and Freedoms, if Parliament or the provincial/territorial legislatures decide to enact such legislation, they cannot deny women access to retroactive compensation for wage-based discrimination. This decision comes at an important time, as the Trudeau government moves forward with its promise to re-vamp and transition the current complaint-based federal pay equity regime into a proactive approach, similar to those enacted in Ontario and Quebec.

Context

The case involved an appeal to the Supreme Court of Canada (SCC or the Court) of a Quebec Court of Appeal decision that held certain Quebec Pay Equity Act (PEA) amendments were unconstitutional.2 As mentioned in a previous publication, the Quebec Court of Appeal found the PEA amendments created a system that was contrary to the purpose of pay equity. The amendments replaced the employer's ongoing obligation to maintain pay equity with a requirement to conduct a pay equity audit every five years.

However, the amendments only required retroactive payments to be made from the date the employer posted the audit results, as opposed to the date the inequities arose. Employees would only be entitled to retroactive payments from the time the pay inequity arose if they could prove bad-faith conduct by the employer, which was seen to be an onerous evidentiary burden. The Quebec Court of Appeal found that the impugned sections gave a "grace period" to employers of up to five years during which pay inequity could go unaddressed.

SCC decision

The main question in this appeal was whether the Quebec courts erred in finding the Pay Equity Act amendments breached subsection 15(1) of the Charter. The cross appeal by the union was whether episodic pay equity, as opposed to maintaining ongoing pay equity, infringed subsection 15(1). In the cross-appeal, the union also argued the PEA was non-compliant with the Charter because employees were not involved in the pay equity maintenance process.

The majority decision held that, while the Charter does not require positive action by legislatures to impose pay equity legislation on employers, when the...