Supreme Court Clarifies Law on Adverse Effect Discrimination

The Supreme Court of Canada’s decision in Fraser v. Canada (Attorney General), 2020 SCC 28 provides a sweeping overview of the law of adverse effect discrimination. This decision specifically targets the alleged discriminatory effect of the RCMP’s policy not to allow those who temporarily reduce their working hours under a job-sharing agreement to “buy back” these periods of reduced working hours for the purposes of their pension. In contrast, those who experienced gaps in their record of service by reason of suspension or spending time on unpaid leave did have the opportunity to buy back pensionable service time. After explaining in detail how this scheme amounted to adverse effect discrimination against female members, the court could find no justification under the Charter for the breach of s.15 on the basis of sex, and therefore it allowed the appeal.

Background

The matter arose when three retired female RCMP members-including Ms. Fraser, after whom the case is named-claimed that the pension consequences of job-sharing as described above had a discriminatory impact on women. As officers returning to full-time service after taking maternity leaves, they felt overwhelmed by their work and care obligations. They each enrolled in the RCMP’s job-sharing program which, as an alternative to taking leave without pay, allowed two or three members to split the duties of one full-time position. From 1997 to 2011, most participants in the program were women, and from 2010 to 2014, they were all women who overwhelmingly cited childcare responsibilities as the reason they enrolled.

While in the program, the officers realized that their participation would negatively impact their pensions because part-time work is pro-rated according to a formula and is less valuable than full-time work. Since members who were suspended or on leave without pay could buy back pensionable service, it made no sense to the three women that under the applicable regulations they could not buy back their lost service and pension benefits for the time they were job-sharing. Unable to obtain a favourable resolution through the internal grievance process, the officers launched a Charter challenge that culminated in the Supreme Court’s decision.

The Court’s analysis

The Supreme Court began its analysis by setting out the language of section 15 of the Canadian Charter of Rights and Freedoms which provides for the right to the equal protection and equal benefit of the law without discrimination and in particular, discrimination on the basis of an enumerated ground such as sex, or based on an analogous ground. The Court stated that to prove a prima facie violation of s.15, a claimant must show that a law or state action, “on its face or in its impact, creates a distinction based on enumerated or analogous grounds,” and that it “imposes burdens or denies a benefit in a manner that has the effect of reinforcing, perpetuating, or exacerbating disadvantage.”

Ms. Fraser did not allege that the negative pension consequences were explicitly based on sex; rather, she claimed they adversely impacted women with children. This called for an in-depth examination of how ”adverse impact discrimination” is treated by academics and courts alike. Put simply, this type of discrimination happens when a law that appears to be neutral disproportionately impacts members of a group protected on the basis of a protected or analogous ground. The adverse impact is described in various ways: The claimants are “indirectly placed at a disadvantage,” frequently as “a product of doing things ‘the way they have always been done’.” The ostensibly neutral rules, restrictions and criteria at issue in cases of adverse effect discrimination operate as “built-in headwinds” for members of protected groups.

The Supreme Court’s jurisprudence on adverse effect discrimination has its roots in the 1985 decision in Ontario Human Rights Commission v. Simpsons-Sears. In that case, a member of the Seventh-Day Adventist Church was required to sometimes work on Friday evenings and Saturdays, days when her faith required her to observe the Sabbath. The court accepted her claim against the store that she suffered discrimination on the basis of her religion. Since then, a number of Supreme Court cases have refined the law in this area. The court states that at its core, adverse impact discrimination “violates the norm of substantive equality” that underpins the law on equality.

The court stated that “Ideally, claims of adverse effects discrimination should be supported by evidence about the circumstances of the claimant group and about the results produced by the challenged law.” Both kinds of evidence will not always be required: Sometimes statistics are useful in showing a disproportionate impact and sometimes the impact will be “apparent and immediate”; it all depends on the case at hand. As for proving the second branch of the test for prima facie discrimination, the court states that there is no “rigid template” of relevant factors, but an examination of the impact of the harm on the affected group may include such things as economic exclusion or disadvantage, social exclusion, physical or psychological harms, any of which must be viewed in light of the claimant group’s systemic or historical disadvantages.

Turning back to the facts of the present case, the court framed the first question as whether the job-sharing pension arrangement had a disproportionate impact on women. It faulted the Federal Court and Federal Court of Appeal for attributing the loss of pension benefits on the RCMP members’ “election” to job-share. As the Supreme Court has frequently stated, “differential treatment can be discriminatory even if it is based on choices made by the affected individual or group.” The courts below were also wrong to have adopted a formalistic comparison with a “mirror comparator group” in holding that the pension plan does not treat those who job-share less favourably than those who go on unpaid leave.

In this case, the statistics about the predominantly female participation in the job-sharing program was compelling evidence leading to the conclusion that the pension repercussions disproportionately affected women. This evidence, it stated, was bolstered by the fact that women have historically taken the “overwhelming share” of childcare responsibilities and are far more likely than men to work part-time as a result. It was clear to the majority of the court that the first part of the s.15 test was met. As for the second part, whether the adverse impact reinforces, exacerbates or perpetuates disadvantage, the court was convinced that it did, taking note of gender biases within pension plans, historically formulated with male, high wage-earning full-time employees in mind.

Having found a breach of s.15 on the basis of sex, it fell to the federal government to prove that a compelling state objective justified excluding the part-time workers from accessing full-time pension credit. The government was unable to discharge its burden. Ironically, the unlawful limitation existed within a scheme that was put in place in 1992 to ameliorate the position of female members who take leave to care for their children. It was intended as a substitute for leave without pay for members who could not take that form of leave due to their personal or family situations. Why, then, treat the two forms of work reduction differently in relation to pension buy-back rights? There was no good answer to this question. In the words of the court, “I see no justification for this limitation, let alone a pressing and substantial one.” In the absence of a justification for the prima facie breach under s.15, the claim succeeded. As a remedy, the court issued a declaration that a breach occurred and directed the federal government to develop a methodology for the buy-back of pension credit in accordance with the court’s reasons. A meaningful remedy for the claimants in this case necessarily meant that these measures must be effective retroactively.

Takeaways for employers

Adverse effect discrimination can occur in a wide range of contexts, given the wide array of spheres in which laws and state actions apply and occur. That this case arose in the employment context involving a high-profile federal employer shows that no employer is immune from the insidious effects of this type of discrimination and they must do all they can to identify it and eliminate it. For example, employers may have policies that impose a work schedule that has an adverse effect on workers’ religious observances. Likewise, a zero-tolerance policy on alcohol or drug consumption may adversely affect employees with legitimate addictions. The scope of potentially discriminatory policies is far-reaching and employers must carefully examine their practices in light of this decision to avoid potential human rights violations.

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