Reports

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Evaluation of the
Employment Equity Audit Program
Management Summary - Final Report
September, 2002

Executive Summary

The Employment Equity Act (EE Act), which came into force on October 24, 1996, gives the Canadian Human Rights Commission (CHRC) the mandate to conduct audits of employers covered by the EE Act to ensure that they are complying with all aspects of the Act. As part of its process of periodic program evaluation, the CHRC engaged Consulting and Audit Canada (CAC) to undertake an evaluation of its Employment Equity Audit Program (EEAP).

A Parliamentary Committee currently conducting a legislative review of the EEAP will consider data presented from this project as well as input from the CHRC and other stakeholders. The CHRC has presented recommendations to the Committee for changes to the existing EEAP.

The objectives of the evaluation were to assess the relevance, success and cost-effectiveness of the EEAP. Fourteen priority issues within these three categories were examined. The scope of the study was restricted to the EEAP as delivered by the CHRC, although some of the relationships with Treasury Board Secretariat (TBS) and Human Resources Development Canada (HRDC) were examined as TBS and HRDC provide advice to the public and private sectors respectively on how to implement employment equity (EE) and achieve compliance with the EE Act. The results of this evaluation are based on the review of documentation, interviews and survey of employers. The evaluation commenced in September 2001 and the field work was largely complete in January, 2002. Follow-up activities were conducted up to the beginning of April 2002.

A wide range of data collection activities were utilized for the evaluation including: a document review; interviews of twenty four (24) key informants at the CHRC, Human Resources Development Canada (HRDC), Treasury Board Secretariat (TBS) and Public Service Commission; a survey of eighty three (83) employers who had been audited; interviews of five (5) private sector employment equity consultants; interviews of five (5) HRDC Workplace Equity Officers; interviews of five (5) TBS Portfolio Officers; a review of employer undertakings which document their commitments to come into compliance under the EE Act; a review of the CHRC’s audit process manual; and, a review of administrative data available through the CHRC Employment Equity Audit Tracking System.

In assessing relevance, the evaluation examined the consistency of the EEAP with the mandate granted the CHRC by the EE Act. Specifically, what role should the CHRC play in promotion and education in relation to the Act? Are the audit requirements imposed on employers by the CHRC consistent with its mandate?

The evaluation concluded that while the EE Act gives HRDC a clear mandate to provide promotion and education, the CHRC’s role in this area is not clearly defined. However, because the role of education and promotion has been under-resourced by HRDC, the CHRC has filled the gap to some extent. There are differences of opinion amongst the CHRC and its EE partners (HRDC, TBS and PSC) as to what constitutes promotion and education. In addition, the evaluation found that the CHRC provided considerable evidence of consultation between it and HRDC and TBS relating to the development of guides, the requirements of the EE Act and the audit process. It is recommended that, in the short term, the CHRC, HRDC, TBS and PSC need to resolve the roles that each plays in promotion and education of EE Act through negotiation. In the long term, an amendment to the EE Act could clearly define the roles with respect to promotion and education.

The evaluation concluded that CHRC places demands on employers that are not explicitly set out in the EE Act or Regulations. The current legislation is somewhat unclear in relation to the specific audit requirements. The CHRC is required to interpret the EE Act to conduct its audit program. The CHRC has made recommendations to the Parliamentary Legislative Review Committee with a view to incorporating its interpretations into the legislation. The CHRC’s partners in Employment Equity (EE) in the federal government (TBS and HRDC) dispute some of its interpretations. This has resulted in some cases in conflicting information being provided to employers and employers being unclear on what is required of them. In summary, the evaluation recommends that there needs to be closer coordination and cooperation amongst all the partners (CHRC, HRDC and TBS) to ensure that clear information is provided to employers and that the audit requirements employers are subjected to that are not explicitly specified under the EE Act should be resolved through the legislative review or discontinued.

In assessing the success of the EEAP, the evaluator considered: why compliance rates on initial audits have been lower than expected; the adequacy of information and tools provided to employers; the reasonableness and consistency of demands made of employers; and the impact of audit activities on compliance rates and representation levels.

The evaluation concluded that expectations for initial compliance rates were too high. Most employers only comply with the requirements of the EE Act when audited. Employers largely said they did not comply because they lacked the resources to do so or did not thoroughly understand the requirements. Furthermore, the evaluation found that employers are predominantly aware of the EE Act and Regulations and the CHRC’s Framework for Compliance Audits. However, there appears to be a problem in employers understanding of the audit requirements (32% of them reported having such difficulty). This may be due to several factors: an under-resourced education and promotion function at HRDC; the CHRC’s interpretations of the audit requirements; inconsistent advice provide by WEOs, Portfolio Officers and auditors; WEOs and Portfolio Officers not having sufficient knowledge of the audit requirements; and, employers not receiving sufficient information or understanding existing information.

There needs to be more education and detailed information (where appropriate) provided to employers on exactly what is required to comply with the legislation. The evaluation recommends that clearer and more detailed guides and additional tools, templates and examples of best practices be provided to employers (subject to the disclosure restrictions the CHRC is bound to under the EE Act), and that there should be better coordination amongst the CHRC, TBS and HRDC in interpreting requirements and developing guides.

The evaluation concluded that, without audits, few employers would be in compliance with the EE Act. Audits have had a significant impact on compliance up to the development of EE plans. In their plans, employers have made significant commitments to come into compliance. Although monitoring of the implementation of EE plans is not yet possible, there is anecdotal evidence of compliance with this requirement. The majority of employers surveyed believed their actions as a result of the audit will lead to higher representation levels. Representation levels have increased since the audits commenced. The evaluation recommends that the CHRC should continue 100% auditing of employers up to the development of EE plans in order to ensure that all employers become compliant and that the CHRC should follow through on their plans to start the monitoring of the implementation of EE plans.

CHRC's approach to audits was considered. Does CHRC emphasize process and numbers over qualitative actions and outcomes? Does it strike an appropriate balance between persuasion and coercion? Is the audit selection process effective?

The EE Act makes certain numerical data demands on employers and the CHRC must enforce this requirement. Many employers believe the CHRC is preoccupied with numbers. The CHRC and its partners are of the view that numbers are the basis of the process but not the focus. The evaluation recommends that the CHRC should continue to ensure that its numerical demands are not more detailed or restrictive than required under the legislation and that HRDC and TBS explain or promote why numbers are required.

The evaluation concluded that most stakeholders are supportive of the focus on large employers, that there are now mostly small employers left for the first round of audits, that if 100% auditing continues, the audit cycle may be around 12 years in total and that there is some support for focussing audits on employers with the greatest potential to impact representation levels (large employers who are in expanding industries). The evaluation recommends that the CHRC should consider whether a focus on employers or sectors with the biggest potential for impact on EE should be the focus while recognizing that employers who are not audited are unlikely to achieve compliance in the absence of an audit.

The evaluation concluded that the CHRC has adequately fulfilled its mandate under the EE Act. Stakeholders find the audit requirements to be reasonable and most employers believe enforcement actions used by CHRC are appropriate. Employers currently rely to a large extent on the CHRC for information regarding the audit requirements and find the CHRC audit reports most useful in assisting them to become compliant. They also find the CHRC’s annual report, which is required by the EE Act, useful.

Finally, cost-effectiveness of the EEAP was examined.

The evaluation concluded that there is a consensus that CHRC audit resources are constrained and that the CHRC will face additional workload as monitoring of the implementation of EE plans commences. Presently, there are mixed views on whether additional resources are required or whether streamlining the audit process will reduce the pressures. The evaluation recommends that:
a) the CHRC should follow through on its investigation of ways of streamlining the audit process for small employers and its review of documents and templates , review the suggestions for streamlining made in this report before considering additional resources;
b) the CHRC also needs to estimate the resource requirements for the monitoring of the implementation of EE audit plan that will be required;
c) the CHRC should expand the capacity of its website to support all of the audit tools that would assist employers in becoming compliant; and
d) the CHRC also needs to take into account the recommendations made by the Parliamentary Legislative Review Committee.

A list of all conclusions and recommendations is found in “Annex A” of this report.
 

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