Audit report

Pay Equity

Dated: January 2003

INTRODUCTION

On July 29, 1998, the Canadian Human Rights Tribunal rendered a decision on pay equity opposing the Public Service Alliance of Canada and the Canadian Human Rights Commission of the Treasury Board Secretariat (TBS).

According to the pay equity concept, TBS had the obligation to ensure that targeted groups be evaluated fairly, according to pay scales applying to male-dominated positions. Wage discrepancy cases between female-dominated jobs and jobs of equal value dominated by males were to be eliminated. The Memorandum of Agreement on the calculation of integral payments as established between the two parties and signed on October 29, 1999 included a calculation method for adjustment payments to the groups involved to be paid out retroactively to March 8, 1985.

Further to this decision, as Public Service Employer, TBS will provide departments involved with all required tools in order for them to develop a procedure which would be followed to issue payments to employees, former employees and retirees of groups involved.

Instructions issued by TBS on the pay equity implementation are explicit and comprehensive. The set order to pay falls between April and November 2000, including also interests to be paid out during the same period. Compensation advisors received the required information concerning the effects on the pay processes over and above workshops to ensure uniformity of application.

Departments were responsible to contact employees concerned to provide information on TBS issued directives. Also, they had to ensure that background data concerning the salary-service situation as provided by Government's direct payroll system were accurate, before issuing of payments

OBJECTIVES

Audit objective was to verify accuracy and conformity of adjustment payments and interests paid out following the pay equity decision.

Audit Scope covered Passport office's (PPT) pay equity payments to employees represented by the Public Service Alliance and employees of the Personnel Category represented by the PE National Assembly.

Work conducted during the Audit included:

a review of documents used to issue equity payments;
interviews with employees from the Pay and Benefits Section;
review of files of employees who received payments; and
audit of amounts paid out.

BACKGROUND INFORMATION

In accordance with the Human Rights Tribunal's decision of July 29, 1998, a Pay Equity Agreement was signed on October 29, 1999, between the TBS and the Public Service Alliance of Canada which stated that a fair evaluation of targeted groups be conducted according to the Agency's pay scales and that salary readjustments be paid out for the period extending from March 8, 1985 to July 28, 1998.

The PPT issued approximately 2,000 pay equity adjustment payments to current and former employees of the targeted groups. Four payments were issued from April 2000 to the Fall of 2000, with a final payment of interests accrued during the same period. Pension and disability benefits were then adjusted.

To be eligible for pay equity readjustment payments and interests, targeted employees had to meet the following criteria.

The employee group represented by the Public Service Alliance had to have worked as members of one of the targeted groups for a federal department or agency during the retroactive period, i.e., from March 8, 1985 to July 28, 1998. These are the Clerical and Regulatory Group (CR), the Stenographers and Typists (ST) and the Data Processing Sub-Group (DA-CON).

The impact of pay equity also involves the Personnel Officer Group (PE). Another Agreement took place between TBS and representatives of the PE National Assembly, signed on November 26, 1999 which provided that this category was also to be evaluated and readjusted. This Agreement, approved by the Canadian Human Rights Tribunal on February 24, 2000, then triggered the salary adjustment procedures for that Group.

The criteria of the PE Group Agreement were much similar to those agreed upon with the Public Service Alliance of Canada Groups except for the coverage period, the amount to be paid out and employees' eligibility to pay equity.

Thus, for the group represented by the Personnel Management Group, employees were to have worked in a position or been appointed to the PE Group at any time between October 1, 1991 and September 30, 1999.

Information notices, news releases, and reports on decisions, offers and special studies on pay equity were made available to departments and employees for information purposes.

As Receiver General for Canada, Public Works and Government Services Canada (PWGSC) issues all payments issued to Government employees. Further to current information on active pay files, all background information on inactive files is also maintained, thus facilitating identification of pay equity readjustment beneficiaries.

PWGSC created electronic files and made them available to departments in order to facilitate identification of the required salary-service background information. Information entered on spreadsheets is checked and approved by the Pay and Benefits Section. Cheques are issued and forwarded to the appropriate pay office for distribution.

RESULTS

Audit results have shown that instructions provided by TBS on pay equity implementation were well followed by the PPT Pay and Benefits Section.

The Pay and Benefits Section took all required action to provide employees, on a timely basis, with the results of discussions between TBS and Unions and the subsequent decisions.

Review of sampled active and inactive files out of all those processed by PPT has shown that pay equity and interest calculations are consistent with employee personal information.

PPT's Pay and Benefits Section employees did quality work and showed professionalism in dealing with the issue.

There is no need for a management response and an action plan, as no observation was made during the Audit.