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EVALUATION OF THE EMPLOYMENT EQUITY COMPLIANCE PROGRAM
by Consulting and Audit Canada (CAC)
CAC CONCLUSIONS
CHRC MANAGEMENT RESPONSE AND ACTION PLAN
October 9, 2003 ISSUE 5: Are the audit demands on employers reasonable? (Is what is reasonable different for large, medium and small employers?) CAC Conclusions - Many employers find the demands to comply with
EE Act and Regulations to be unreasonable; employers estimated average resource demands were
271 person-days and $50,000 in contract fees. - Employers reported that, on average, 72% of the resources they reported that they required to respond to the audit were simply required to comply with the EE legislation.
- More employers find audit demands to be unreasonable than find them to be reasonable; calculated average resource demands were
73 person-days and $14,000 in fees. - Stakeholders, generally, find the audit requirements to be reasonable.
- There is a consensus that the audit demands are onerous for small employers.
- The main areas which employers and stakeholders see as being unreasonable are the amount of detail demanded, the CHRC’s interpretations and inflexibility and the time lines demanded by CHRC. However the review of files showed evidence of flexibility being provided.
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CAC Recommendation 5.1:
The CHRC should review its requirements and try to reduce the burden on employers as much as possible (make clear expectations/interpretations, ensure consistency within CHRC and with its partners) while at the same time ensuring that the requirements of the EE Act are complied with.
CHRC Management Response: Agree
- The CHRC is committed to minimizing undue burden on employers while fulfilling its obligations under its legislation.
- Unfortunately, the report fails to determine which requirements, in view of the Commission’s legislative mandate, may be too burdensome for employers, nor the extent to which it is the requirements of the Act rather than the requirements of the audits that are at the source of this issue. The Commission believes that its audit standards accurately reflect the requirements of the legislation, a fact which has been largely borne out by the Parliamentary Committee reviewing the Act.
- Notwithstanding, as identified in recommendation 5.3, the CHRC is introducing a streamlined approached for smaller employers which should enable them to reach compliance more quickly than in the past.
- In terms of making expectations clear and ensuring consistency within CHRC and amongst its partners, the MOUs referred to under recommendation 1.1 should provide more consistency and clarity.
| ACTION PLAN: The Commission has introduced a streamlined approach to reduce workload and enable smaller employers to reach compliance more quickly, and is working through the MOU process to facilitate and enhance consistency and clarity. |
CAC Recommendation 5.2:
In setting time lines, the CHRC auditors should continue to ensure that they consider the employers’ specific context and their ability to respond.
CHRC Management Response: Agree - No specific action is necessary, as the recommendation recognizes that this is something that the Commission is already doing.
| ACTION PLAN: Reflects existing practice |
CAC Recommendation 5.3:
The CHRC should follow through on its investigation on how the audits for small employers can be streamlined
CHRC Management Response: Agree - The Commission has developed and implemented a pilot project testing a streamlined audit approach for 25 employers who have between 100 and 300 employees.
- In addition, the EE Branch has developed a streamlined approach for the public service organisations that have less than 100 employees which is now being implemented.
- Notwithstanding, as identified in recommendation 5.3, the CHRC is introducing a streamlined approach for smaller employers which should enable them to reach compliance more quickly than in the past.
- In terms of making expectations clear and ensuring consistency within CHRC and amongst its partners, the MOUs referred to under recommendation 1.1 should provide more consistency and clarity.
| ACTION PLAN: No further action required |
ISSUE 6: Is there consistency in the demands made on employers by different auditors? CAC Conclusions - Most employers with reported knowledge of different auditors believed that auditors were inconsistent.
- Inconsistencies were reported primarily in flexibility that individual auditors provided, level of detail required, and communication approaches.
- A review of five files which had a change of auditor showed no indication of different auditors making different demands.
- CHRC suggests that different audit approaches are applied depending on environment, level of compliance and cooperation.
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CAC Recommendation 6.1:
When the CHRC changes formal or informal standards, employers should be advised.
CHRC Management Response: Agree - This matter has already been dealt with under recommendation 2.2. Audit standards have not changed since the program’s implementation, and are clearly outlined in the Commission’s Framework for Compliance Audits and Chapter 8 of the Process Manual which are available on the CHRC and HRDC web sites.
- In addition, employers are kept up-to-date on developments in auditing through the Annual Report. As the Employer Survey demonstrated, 91% of employers are familiar with the Annual Report and 78% find it useful.
- If standards change, the EE Branch will revise its manuals and inform employers accordingly.
| ACTION PLAN: Reflects existing practice. |
CAC Recommendation 6.2:
The CHRC should review their audit approaches to ensure that different approaches based on context do not affect the consistency in demands on employers.
CHRC Management Response: Disagree - The Commission is committed to ensuring consistency in audit approaches.
- The auditor found no evidence to support the claim that there are inconsistencies of approaches between auditors. The report itself states that “a review of five files which had a change of auditor showed no indication of different auditors making different demands”. The audit supervisor and Audit Review Committee ensure continuity in the event that there is a change of auditor.
| ACTION PLAN: No action required |
CAC Recommendation 6.3: The CHRC should ensure that they explain to employers, perhaps in the Framework for Compliance in more detail, why audit approaches may differ and in what circumstances. CHRC Management Response: Agree The Commission constantly strives for clarity in the execution of its mandate. It will continue to highlight this important element of its approaches not only in its Framework for Compliance, but in its process manual, annual report and other prominent literature. The Framework for Compliance already makes this clear in its Preface where it describes its guiding principles. It is also highlighted in a special cover page introducing the Assessment Factors as follows: These factors reflect the essential elements of good employment equity planning. They should not be viewed as an inflexible standard for compliance with the law. The Commission recognizes that there will be cases in which the implementation of certain elements will need to be considered judiciously in order to reflect special circumstances surrounding individual organizations. Where legitimate obstacles to the implementation of certain factors are found to exist, or where compliance may result in undue hardship and the exercise of discretion is warranted, good faith efforts will be a key criterion in assessing compliance.
| ACTION PLAN: Reflects existing practice. |
ISSUE 7: What impacts have the audit activities had on compliance rates of employers? CAC Conclusions - Without audits, few employers would be in compliance up to the development of EE plans.
- If plans are implemented, employers will be undertaking significant activity to achieve employment equity.
- The audit reports are most useful to employers in assisting them in becoming compliant.
- There is little evidence of compliance with the implementation of EE plans other than anecdotal information (please also see issue # 8 re the impact on representation levels) (It will not be possible to accurately assess the implementation of plans until 2002 or 2003 when significant numbers of employers should have implemented their plans.)
- The monitoring of implementation of plans has not yet started and there have been no audits to verify the implementation of plans.
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CAC Recommendation 7.1:
The CHRC should continue auditing of employers up to the development of EE plans.
CHRC Management Response: Agree - This recommendation reflects an existing practice which will continue to be a priority for the Commission.
| ACTION PLAN: Reflects existing practice. |
CAC Recommendation 7.2:
The CHRC should follow through on their plans to start the monitoring of the implementation of plans.
CHRC Management Response: Disagree - The Employment Equity Branch already has a system in place to monitor the progress made by employers in implementing their plans, and to audit for reasonable efforts where there appears to be a lack of reasonable progress
| ACTION PLAN: No further action required |
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