Publications by Section

Legislative Review of the Employment Equity Act

4. GIVING THE COMMISSION A CLEAR MANDATE

Background

In undertaking its mandate to ensure compliance with the Act’s requirements, the Commission identified twelve statutory requirements which it considers to be integral to the legislation. It also established assessment factors to determine compliance, based both on concepts explicitly stated in the legislation as well as standards which it is reasonable to assume must be met if the intent of the legislation is to be achieved.

In some cases, standards used under the assessment factors have been challenged at Tribunal. Although they were subsequently withdrawn, these challenges have created significant delays and questions as to the interpretation of the Commission’s standards.

Results from the employer survey (Appendix 3) also bear this out, as 43% of employers feel that there are inconsistencies in messages received from various partners under the legislation. The potential also exists in a number of areas for future challenges.

It is these statutory requirements which need to be clearly articulated, and some of these assessment factors on which the Commission has been challenged which need to be clarified in the legislation. These requirements, attached as Appendix 5, have been outlined in the Commission’s Framework for Compliance Audits under the Employment Equity Act.

4.1 STATUTORY REQUIREMENTS

From our Discussion Paper

The twelve statutory requirements related to the obligations of employers are often misunderstood by employers. To-date, the validity of the statutory requirements has not been challenged. While they are all carefully derived from the obligations established in section 8 of the Act, the Commission remains concerned that the requirements are not clearly articulated.

The Discussion Paper included a recommendation to amend the legislation so that the twelve statutory requirements are clearly articulated, including how each requirement relates to the other. These requirements could then be defined in greater operational detail in the regulations.

Consultation Results

Generally there was either agreement or no opposition to this recommendation. One employer group suggested that this could be handled by guidelines while another suggested that this could be the subject of regulations. A number of advocacy groups and employment equity consultants suggested that the Commission’s 46 assessment factors (Appendix 5) used by Compliance Review Officers to determine employer compliance with the 12 statutory requirements, should form the basis for the regulations.

Recommendation 10

The twelve key statutory requirements need to be clearly articulated along with their sequential relationships to each other. The Regulations should therefore be amended to do this and to provide operational clarity for each requirement in a manner that would provide employers with accessible standards for reaching compliance.

4.2 CLUSTERING ANALYSIS

From our Discussion Paper

Although required under assessment factor 2.3, a clustering analysis within an occupational group is not specifically identified in the Act nor described in the Regulations. It is, however, an important requirement in order to assess the impact of promotion systems and processes as well as provide possible indications of why a designated group may experience retention problems. Currently, the Commission believes it can require such an analysis as part of the workforce analysis only when under-representation has been determined, and where numbers warrant.

Section 26 of the Regulations already requires private sector employers to collect and report data on the salary quartile in each occupational group in their workforces. These data provide information about the distribution of designated groups compared to others within the occupational groups. The data enable an employer to determine whether or not designated group members are disproportionately clustered in lower levels compared to other employees.

For the Public Sector, the occupational groups are already stratified by levels. If designated group employees are concentrated in lower levels, this is an indication that there may be obstacles to promotions which require attention and action.

The Discussion Paper proposed amending the regulations to require a clustering analysis for all occupational groups and categories where numbers warrant.

Consultation Results

The consultation process found a considerable difference in opinion between, on the one hand, public and private employers’ organizations and, on the other hand, advocacy groups and unions. The former expressed a strong view that a requirement for such an analysis would only add complexity to an already complex exercise and should be simply left as a tool for the employer.

One major organization indicated that their members already do complete at least some clustering analyses and that a clarification of the phrase "where numbers warrant" to mean areas with a substantial number of employees might reduce concerns.

Most designated groups and union representatives were equally strong in their view that a clustering analysis is a needed requirement even where there is full representation in an occupational group. Many designated groups believe that recent progress in representation levels masks a clustering of their members in lower levels. As many employers give priority to internal employees when positions become available, these groups believe clustering in lower levels can slow the progress made in closing representation gaps in higher level occupational groups.

The Commission continues to believe that a clustering analysis is required in order to ensure equity within the workplace. While the proposed recommendation would expand the Commission’s current requirement beyond just those occupational groups with under-representation, the data which must already be collected will allow employers to complete this analysis. Specifying that such an analysis is required only where the size of the occupational group and the representation of a designated group warrant will ensure such analysis is meaningful.

Recommendation 11

Amend the Regulations to require a clustering analysis for all occupational groups and categories where the size of the occupational group and the representation of a designated group in that occupational group warrant.

4.3 EMPLOYMENT SYSTEMS REVIEW

From our Discussion Paper

The current Act and Regulations require an employer to review its employment systems, as well as policies and practices, to identify barriers to members of designated groups for occupational groups in which under-representation has been found. The Commission’s assessment factor 3.5 requires that the results of the systems review must be documented and provide probable explanations for the under-representation found in each occupational group.

In two Tribunal challenges filed by employers and subsequently withdrawn by them, the requirement that the employment systems review provide a probable or reasonable explanation for the under-representation in an occupational group has been challenged. Should such a challenge ever be upheld, the Commission would have no meaningful grounds on which to assess the validity of an employer’s findings and hence no means of measuring compliance with the requirement to complete an employment systems review. Subsequently, there would then be no meaningful basis on which to assess whether or not an employment equity plan would lead to reasonable progress if implemented.

The Discussion Paper proposed that the legislation be amended to clarify the objective of the employment systems review and its relationship to both the workforce analysis and the employment equity plan.

Consultation results

On the whole, employer organizations from both the public and private sectors did not object to such a clarification. Most, however, reserved judgement until they could see the precise legislative language proposed. One organization suggested that this relationship could best be articulated in the Regulations. The chief concern expressed is that employment systems reviews are not an exact science and legislative requirements that could be interpreted as requiring all barriers be identified might result in an impossible standard.

Some employer groups also suggested that the Commission should hone existing employment systems review templates and develop additional templates and guides that would assist employers to meet their obligations. Advocacy groups and unions strongly supported the recommendation to clarify the role of the employment systems review as a statutory requirement in terms of the standard that must be met.

One written submission from an advocacy group raised strong concerns with a lack of definition in the Act of what is an "employment barrier" while the same Act does go into considerable detail on what is not a barrier even when a practice or policy contributes to under-representation.

Similarly, the attention given to the fact that employment equity does not mean hiring unqualified persons or violating the merit principle was criticized as unnecessarily adding to the "documented backlash" faced by those designated group employees who have progressed through their abilities.

Recommendation 12

Amend the regulations to specify that an employment systems review

• is required for each occupational group where the workforce analysis indicates significant under-representation of designated groups;
• must identify those barriers which provide a reasonable explanation for the under representation of the designated group in the occupational group and which, if removed would permit progress towards full representation; and
• provides the basis for formulating the employment equity plan.

The Regulations should also provide employers with a clear set of standards for conducting an employment systems review. This should include guidelines on determining when an occupational group/designated group should or should not be selected for review and what constitutes a reasonable explanation.

4.4 SPECIAL MEASURES

From our Discussion Paper

Section 2 of the Act sets out "The Purpose of the Act" as follows: "that employment equity means more than treating persons in the same way but also requires special measures and the accommodation of differences." However, the Act never again uses the term "special measures" although it does use the term "positive policies and practices". Thus, the employment equity plan must specify " the positive policies and practices that are to be instituted by the employer in the short term for the hiring, training, promotion and retention of persons in designated groups..." s.10 (1)a.

In assessing compliance, the Commission interprets the Act’s statutory requirement to be that "the employment equity plan must specify short-term positive policies and practices, as well as special measures aimed at providing opportunity to members of under-represented designated groups with respect to hiring, training, promotion and retention." In assessment factor 6.2, the Commission defines the meaning of special measures.

Generally, the Commission considers positive policies and practices as first, good employment equity and harassment policies and second, initiatives open to all employees but having particular benefits for designated group members. Special measures are those initiatives which involve conscious decision making based on gender, race, disability, etc. Such measures have to be designed based on the Commission’s policy on special measures relating to section 16 of the Canadian Human Rights Act i.e. tailored to a situation of demonstrable disadvantage, temporary in nature, and designed in a manner which prevents undue exclusionary effects on non-designated group members.

The Commission also requires that the positive policies and practices and special measures proposed by the employer in the employment equity plan be sufficient to ensure that the short term hiring and promotion goals are achieved. In two cancelled Tribunal appeals launched by public service departments, the employers argued that this standard was not required by the Act.

The Discussion Paper proposed amending the legislation, first to articulate clearly the requirement for special measures and second to require that the employment equity plan must have sufficient positive policies and special measures to ensure a reasonable expectation that short term hiring and promotion goals are achieved.

It also proposed that the Regulations be amended to specify that a required part of positive policies and practices will be employment equity and harassment policies that must be communicated to managers and employees.

Consultation Results

While most employer organizations did not object to this recommendation, there was discussion about the interpretation of the term "sufficient." Providing an operational definition is difficult because sufficiency will be closely linked to the particular circumstances of the organization, the size of the gaps in representation, and the goals established (see section below on hiring and promotion goals).

All advocacy groups and unions who responded to this proposed recommendation considered special measures to be an integral component of employment equity. A national Aboriginal organization emphasized the importance of special measures in ensuring accessibility for the rapidly growing Aboriginal youth population. The same organization also placed considerable emphasis on the need for targeted initiatives to assist doubly disadvantaged aboriginal workers including women and persons with disabilities. The same point about the special circumstances of doubly disadvantaged workers was made by several organizations representing other designated groups and by unions.

A number of organizations raised concerns throughout about the lack of concreteness in terms such as "reasonable," and "sufficient." Some employers believe their subjectivity gives the Commission too much latitude to impose what is acceptable while other groups believe that they weaken the ability to impose appropriate standards. The Commission, however, believes that the record to date demonstrates that, within the complex and varied circumstances of human resource management, allowing compliance review officers to assess and negotiate what is appropriate in each situation remains the best approach at this time.

First, under the legislation, employers retain the right to request an independent review when the Commission imposes a direction the employer believes exceeds what is mandated by the legislation. Second, the monitoring of the performance of employers who have achieved compliance will demonstrate whether or not measures found in compliance are sufficient to achieve goals.

Recommendation 13

The Commission continues to support the need to clearly articulate the requirement for special measures as part of the employment equity plan. The requirement should include the standard that the employment equity plan must have sufficient positive policies and special measures to ensure a reasonable expectation that short term hiring and promotion goals will be achieved.

Amendments to the Regulations should provide direction on the operational requirements to meet this standard, e.g. what will be taken into consideration in assessing whether or not the proposed positive policies and special measures are sufficient to achieve the goals.

The Commission also continues to support an amendment to the Regulations to specify that a required part of positive policies and practices will be employment equity and harassment policies (or employer guidelines) that must be communicated to managers and employees.

4.5 HIRING AND PROMOTION GOALS

From our Discussion Paper

Paragraph 10(1)(d) of the Act establishes a clear requirement to develop short term hiring and promotion goals for each occupational group where under- representation has been found. Section 10 defines short term as one to three years.

Where there are areas of significant under-representation, employers are required to set short term hiring goals greater than the availability in the labour market. Similarly, short term promotion goals must be at least equal to internal representation in the workforce, that is, as a minimum, one would expect designated groups to be promoted in equal proportion if barriers to promotion have been removed. Some employers have vigorously challenged this standard.

Sub-Section10(2) of the Act, however, sets out the variables which must be considered when establishing appropriate goals. These include such things as turnover and hiring rates as well as the degree of under-representation. As hiring goals must never be set below availability (otherwise, discrimination is still taking place), the consideration of the above variables is only logical if the establishment of goals above availability were envisioned by the Act. Indeed, section 11 sets as the standard for the employment equity plan, "reasonable progress." Thus the Commission requires goals above availability when gaps are significant, and when the achievement of reasonable progress in closing gaps necessitates such goals.

As with many of the standards imposed by the Act, the actual required level of a goal depends on the unique situation of each employer. The Act and Regulations, therefore, require the employer and the compliance review officer to reach agreement on appropriate levels; the Review Tribunal is charged with resolving any situations where agreement cannot be reached. This has yet to happen although a few Tribunals are pending. The Discussion Paper proposed amending the Act to clarify the requirement to establish hiring and promotion goals at no less than availability. Hiring goals would be required above availability when the analysis of the variables established in section 11 indicates that this is necessary in order to achieve reasonable progress towards full representation during the term of the employment equity plan.

Consultation Results

Some employer organizations sought only clarification of the full meaning of this recommendation while one major organization indicated that it had no problem with this proposed change.

The public service employer expressed some concerns over the logic applied by the Commission but it should be noted that the Embracing Change initiative for visible minorities in the public service requires goals at approximately double workforce availability.

Again, advocacy and other groups supported the recommendation.

Recommendation 14

The Commission continues to support an amendment to the Act to clarify the requirement to establish hiring goals at no less than availability and above availability when the analysis of the variables established in section 11 indicates that this is necessary in order to achieve reasonable progress towards full representation during the term of the employment equity plan. Similarly, promotion goals should be at least equal to internal representation.

4.6 ACCOUNTABILITY

From our Discussion Paper

Under the statutory requirement for monitoring, review, and revision of the employment equity plan, the Commission includes a standard requiring that the employer’s managers are clearly accountable and committed to the organization’s plan.

While accountability is not specifically cited in the Act, it is the Commission’s position that, given the Act’s requirement that the plan ensure "reasonable progress" and considering the basic principles of effective management, requiring accountability in the plan is consistent with the Act. The Commission has not experienced significant opposition to this requirement from employers, perhaps because accountability is considered so integral to good management

The Discussion Paper proposed an amendment to the Act to include an explicit provision for accountability with the minimum requirements for acceptable accountability mechanisms outlined in the Regulations.

Consultation Results

The response of employers’ organizations varied on the issue of articulating an accountability requirement. One organization expressed a strong view that management accountability was an internal business matter that should not be subject to a legislative requirement. The company and thus the CEO, it was felt, were accountable under the Act and it was his/her obligation to ensure compliance.

One organization generally agreed with the recommendation on the condition that it remain as part of the monitoring statutory requirement rather than as a separate new obligation. Full judgement was reserved until the "minimum standards to be set out in the regulations" have been defined. Finally, a third organization indicated that it had no problem with the recommendation as a whole as long as it was applied only to the few top levels within an organization.

Some of the concerns expressed related to the level of verification which the Commission would conduct. These concerns were alleviated somewhat when it was explained that the Commission’s current practice would not change. This is restricted to providing evidence that an appropriate accountability strategy is in place, rather than passing judgment on individual accountability standards.

Advocacy groups and unions strongly support a clear accountability requirement. Accountability was also raised as a significant issue during the consultations conducted by HRDC, as outlined in the Report submitted to the Committee by the Minister of Labour.

Recommendation 15

The Commission continues to support an amendment to the Act to include an explicit provision for accountability. The standards for acceptable accountability mechanisms should be outlined in the Regulations based on further consultations with employers.