Will the Pay Transparency Act Narrow the Gender Pay Gap? Bill 57 Halts our Chance to Find Out

Dec 28, 2018

Despite pay equity and anti-discrimination laws, female workers in Ontario earn less than their male counterparts. To address this gender wage gap, shortly before 2018 provincial election the Liberal government passed the Pay Transparency Act (“PTA”), putting the onus on employers to publicly report gender pay to build fairer workplaces. It was scheduled to take effect on January 1, 2019.

The PTA would have created numerous requirements for employers regarding compensation disclosure and filing pay transparency reports with the government. Specifically, the PTA prohibited all employers from either directly or indirectly asking job candidates about past compensation. It also would have required that employers post a compensation rate or range for all publicly advertised job postings, while prohibiting employers from reprising against employees who make inquiries about compensation practices.

Shortly after the election however, Premier Ford halted the coming into effect of the PTA by way of Bill 57.

On December 6, 2018, Bill 57, the Restoring Trust, Transparency and Accountability Act, 2018, received Royal Assent. It delayed the implementation of the Pay Transparency Act, 2018 (“PTA”) from January 1, 2019 to “a day to be named by proclamation of the Lieutenant Governor.”

What is the Status of Ontario’s Pay Transparency Act?

It is not known when the PTA will come into force. If I were a betting person I would say not while Doug Ford is Premier.

Since the PTA has been postponed, employers are currently not required to create pay transparency reports and may limit their employees’ ability to disclose their compensation information.

Further, employers do not have to determine a compensation range before posting a job; they can continue to determine compensation rates based on a variety of factors such as the candidate’s experience and qualifications.

For more information on an employee’s pay transparency obligations, contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.

There are many ways to attack the termination clause in an employment contract. 

I am now surprised if employee counsel does not claim that their client’s  termination clause is not legally enforceable - usually because the termination clause does not allegedly comply with the Employment Standards Act.

This blog considers a case, McKercher v Stantec Architecture Ltd., 2019 SKQB 100, where an employee successfully attacked the termination clause in his contract because he did not explicitly agree to it after being promoted. 

The Facts

In 2006, Mr. McKercher commenced employment as a staff architect. The termination clause in his employment contract stated: 

Termination other than for cause will be with notice or pay in lieu of notice, based on your length of service. If the Employer terminates your employment for other than just cause you will receive the greater of:

  1. a)   Two weeks notice or pay in lieu of notice during the first two years of employment increasing by one week for each additional completed year of employment to a maximum of three months notice or pay in lieu of notice.

      or

  1. b)   The minimum notice of termination (or pay in lieu of notice) required by applicable statutes.

Eleven years later, when Mr. McKercher was employed as a Business Centre Sector Leader, his employment was terminated. The employer paid him the three months termination pay he was owed under his employment contract.

 

Another way to attack a termination clause: What is the changed substratum doctrine?

An Ontario judge in a 2012 case, MacGregor v National Home Services, 2012 ONSC 2042 (CanLII), described this legal doctrine as follows: "The changed substratum doctrine … provides that if an employee enters into an employment contract that specifies the notice period for a dismissal, the contractual notice period is not enforceable if over the course of employment, the important terms of the agreement concerning the employee’s responsibilities and status has significantly changed."

 

The rationale for this doctrine has been described by one judge, Schmidt v AMEC Earth & Environmental Ltd., 2004 BSCS 2012 (CanLII), as follows: "In my view, it was incumbent on the defendants to advise Mr. Schmidt that they intended to continue to rely upon the termination provision set out in the Agreement when substantial changes in his employment occurred. This would have allowed him to consider the matter and to negotiate for other terms. If the defendants wished to continue to rely on the termination provisions there ought to have been a ratification of the provisions as the nature of Mr. Schmidt’s employment changed."

 

Decision

The judge hearing this case relied on the following factors when deciding not to enforce the termination clause in the employment contract: ”...there is no evidence that (the employer) made it clear to the (employee) that the notice of termination provisions were intended to apply to the positions to which he was promoted. The employment agreement contains no express wording to this effect, nor does it contain any wording to support the inference of such an intent. Further, and in keeping with the analysis in Schmidt, the Court received no evidence that, as it promoted the plaintiff, SAL reasserted its understanding and expectation that the notice of termination limit would remain in effect.”

 

Lesson to be learned:

An employer should make it clear that the termination clause in an employment contract applies when an employee is promoted. This expression of this intent should be in writing and should be clear and unambiguous. I recommend that an organization’s employment be reviewed by an employment lawyer every year or two. If your employment contract does not address this issue then think about doing so the next time it is reviewed.

 

For 30 years, Doug MacLeod of   the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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