Thank you, Madam Chair.
My name is John Farrell. I'm the executive director of Federally Regulated Employers - Transportation and Communications. Joining me today as an adviser on pay equity matters is Ms. Barbara Gagné, manager of labour relations and classification at Nav Canada, a FETCO member.
I have provided the clerk with a full report of our point of view. It will be translated and will be provided to the committee. Given time constraints, I'll confine my comments basically to those key matters that we believe are important to federally regulated employers with respect to Bill C-471.
First of all, FETCO unequivocally supports pay equity. The vast majority of FETCO members are federal contractors and already comply with section 11 of the Canadian Human Rights Act and with other employment legislation, including the Canada Labour Code and the Employment Equity Act. The challenge is to devise and execute a fair and equitable plan that will achieve pay equity to the extent possible in an appropriate period of time.
FETCO appeared as a witness before this standing committee with respect to the Public Sector Equitable Compensation Act. We gave evidence that we believed certain aspects of this act were beneficial, primarily in that it requires both employers and unions to share the responsibility for equitable compensation. It also proposed, in our view, more efficient, effective, and equitable problem-solving and dispute resolution procedures.
With respect to the recommendations of the pay equity task force, I wish to reiterate FETCO's point of view, which was expressed in advance of the pay equity task force in 2004 and when we made comments on the report of the pay equity task force at that time.
First and foremost, FETCO supports a proactive problem-solving approach to pay equity. However, pay equity has an integral part in the determination of wages and other employment compensation, in conjunction with the many other factors that influence wages and compensation in a market-driven economy. The skill level, effort, responsibility, and working conditions required for a given career path affect wages. So do the supply of persons available and the demand for employees in a given labour market. The state of the company or the organization affects pay equity, and the state of the industry in which the company operates affects pay. The level of unionization of the workforce and the relative strength of the union in its ability to bargain for the bargaining unit and to negotiate wage and benefit increases also affect pay practices. The priorities of the workforce in terms of trade-offs involving wages, benefits, working conditions, work–life balance, and the duration of collective agreements affect pay practices.
Therefore, a full understanding of all the aspects that affect compensation is required in order to develop a plan and redress any inequities that may exist. In addition to possessing an understanding of human rights matters, persons assisting in the resolution of pay equity matters and the adjudication of pay equity disputes must also understand wage and benefit compensation, labour and employee relations, and business economics.
Pay equity legislation must be simultaneously considered in conjunction with the Canada Labour Code. Both employers and unions must jointly be held accountable for achieving pay equity. This must be a bilateral responsibility, not a unilateral employer responsibility, as is currently the case. This is one of our major points. In a unionized environment, it is the employer and the union acting together that make a bilateral agreement about what compensation is to be paid to employees. In fact, the union plays a major role in the distribution of the total compensation package. Both pay equity and collective bargaining are over the same activity: the level, structure, nature, and amount of compensation. In a unionized environment, these two activities must be integrated.
The current process allows unions to negotiate an agreement and then file a complaint under section 11 of the Human Rights Act and claim it has been violated. The end result is additional wage adjustments. In effect, the unions are using pay equity as a means to double-dip. This is one of the principal reasons that pay equity complaints have been protracted and contentious. This double-dipping must stop.