Quebec Superior Court Invalidates Certain Provisions of the Pay Equity Act

A coalition of unions led by the Fédération interprofessionnelle de la santé du Québec (FIQ) has won a court challenge against certain provisions of the 2009 reform of Quebec’s Pay Equity Act. The provisions in question require employers subject to the Act to audit pay equity in their businesses every five years, but not continuously. In other words, since 2009, Quebec employers have been required to perform a pay equity audit at the end of each five-year period, prepare a list of events that generated wage adjustments (e.g., promotions), and only pay the wage adjustments due at that time rather than when the adjustments occurred. The first audits would have taken place this year.

As a result of the FIQ challenge, on January 22, 2014, the Superior Court deemed sections 76.3 and 76.5 of the amended Act unconstitutional. These provisions describe the substance of employers’ obligations in maintaining pay equity. One describes the information that the employer must post following the audit process, and the other describes the non-retroactive adjustments that may arise. The plaintiffs—representing predominantly female job classes—argued that the changes introduced during the 2009 reform penalized employees because they were not entitled to a retroactive wage adjustment from the time a change in their job was recognized, but only after the pay equity audit, which could occur five years later.

The amendments were intended to push the many Quebec businesses that have failed to comply with the Pay Equity Act into action, but it seems that they may have the unintended effect of limiting or reducing affected workers’ compensation. For example, if only audited at the end of a five-year period, a wage adjustment could result in significantly lower pension benefits.

According to the Superior Court, the obligation to pay salary adjustments without the possibility of retroactivity is a source of discrimination based on sex and continues the systemic discrimination against women the Act was supposed to eliminate. The Court found the two provisions of the Act invalid, unenforceable and ineffective because they derogate from sections 15 and 52 of the Canadian Charter of Rights and Freedoms and sections 10, 16 and 19 of the Quebec Charter of Rights and Freedoms. The provisions in question violate the right to equality of women at work because they create conditions that substantially diminish several other rights and benefits conferred by the Pay Equity Act.

Judge Edward Martin asked that the government modify the Pay Equity Act to better inform employees of changes that lead to salary adjustments as a result of the five-year pay equity audit, and that salary adjustments be due at the time of the change rather than the time of the audit.

However, the Court’s declaration of invalidity, unenforceability and infectivity is suspended for a period of one year (January 24, 2015), to allow the government time to modify the law.
Unfortunately, on February 21, 2014, Quebec’s Minister of Justice filed a notice to appeal the judgement stating that it contains errors of fact and law that deserve to be reviewed by the Court of Appeal. It will be interesting to hear what the Minister of Justice believes is incorrect in the Superior Court’s ruling and what the Court of Appeal has to say on the matter.