Definition of employer widens

B.C. Supreme Court decision in case involving the Vancouver Police Board is a reminder that parent companies can be held liable for discriminatory actions by subsidiaries

The definition of employer in the human rights context must be broad and flexible so as to give effect to the purpose of British Columbia’s Human Rights Code.

This was the finding of the British Columbia Supreme Court in the recent decision of Reid v. Vancouver Police Board. Janet Reid and the other petitioners, all female communications operators at the Vancouver Police Department, alleged before a human rights tribunal that they were paid less than male communications operators doing the same work at the Vancouver Fire Department. Section 12 of the B.C. Human Rights Code prohibits an employer from paying an employee of one sex a lesser amount than an employee of the other sex for the same or similar work.

The human rights tribunal dismissed the complaint because it found the police communications operators did not have the same employer as the fire department communication operators — the former group being employed by the police board, the latter by the City of Vancouver. The B.C. Supreme Court reviewed the decision and found the tribunal used an unnecessarily narrow approach in its determination of the employer — an approach it found not to be in keeping with the intent of the Human Rights Code.

In making its decision the tribunal said the correct test for determining the definition of an employer was the test articulated in a number of pay equity cases: the entity that has control of compensation practices and the valuing of work should be considered the employer.

The tribunal argued this was the appropriate test since “the entity that established the existing compensation practices at some point made some decisions about the value of work in that workplace. That entity therefore is in the best position to review those practices and remedy gender inequalities to establish pay equity.”

In applying this test, the tribunal found the police board, and not the city, was responsible for core higher-level employer functions (collective bargaining, responsibility for classification and hiring and firing) and so the board should be considered the employer of the communication operators. The tribunal found the city’s responsibility stemmed from its role as a funder and a service provider, but that it was not the controlling mind in respect to compensation and classification. Although the board was economically dependent on the city for its funding and the size of its budget, the tribunal felt the board still had considerable independence to move funds within the budget. For the tribunal, the most important question to ask was who could provide a remedy to the complainants if their complaint was substantiated, not who ultimately paid the bill.

In reviewing the decision, the court found the tribunal’s determination of the employer was based on the fact the board performed key higher-level employer functions within the employment relationship. The court argued such an approach did not allow for consideration of other factors, such as which entity in practice could alleviate the alleged pay inequity? With the cost of correcting the wage discrimination alleged by the petitioners to be more than $1 million per year, the city was the only entity that could have provided the extra budget to remedy the pay disparity. As a former chief constable testified, the police department could only move small amounts from item to item within the budget. “It’s, you know, a couple thousand here, a couple thousand there, not a $35,000 or $50,000 (per) year position,” he said.

In determining an employment relationship for the purposes of the Human Rights Code, a broader and more flexible approach will be taken as compared to a common law context. The court found this to be necessary in order to give effect to the special purpose of the legislation, that of minimizing the effects of discrimination at an individual and systemic level. With this in mind, employers must be aware that an employment relationship may be established even when they are not participating in the relationship in a traditional manner. For example, a parent company may be found to be jointly responsible for a subsidiary’s discriminatory actions even when the parent was not directly involved. The lesson here is that employers should try to stay abreast of the policies of any associated or affiliated company to ensure that their policies are also in keeping with the standards set by B.C.’s Human Rights Code.

For more information see:

Reid v. Vancouver Police Board, 2003 CarswellBC 2159, 2003 BCSC 1348 (B.C. S.C.)

Sumana Dasgupta was recently called to the bar of British Columbia after articling at the law firm of Lawson Lundell in Vancouver.

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