VII. AFFIRMATIVE ACTION (AA)/ EMPLOYMENT EQUITY (EE) POLICIES AND PROGRAMS IN THE UNITED STATES, CANADA, SOUTH AFRICA, THE EUROPEAN UNION COUNTRIES AND NETHERLANDS

Employment Equity in Canada and the United States

MORLEY GUNDERSON,
DOUGLAS HYATT,
AND SARA SLINN
University of Toronto

Abstract

      Employment equity in Canada and the United States is analyzed with respect to various dimensions including: the legal environment; the rationale; the mechanics or steps involved; the relationship to collective bargaining; and the evaluation of its impacts. Particular attention is paid to the relationship of employment equity to related policies and practices including: pay equity (comparable worth); diversity management; family-friendly work practices; barrier identification strategies; and human rights and antidiscrimination policy in general.

      Employment equity means different things to different people-ranging from the general concept of equity or fairness at the workplace to more specific concepts pertaining to requirements to achieve particular representations of target groups in the internal workforce of organizations. The latter, more specific concept is the subject matter of this analysis. The term affirmative action is more commonly used in the United States, while employment equity is the term used in Canada, coined by the Abella Commission (1984) in part to differentiate from the earlier U.S. affirmative action initiatives that were often associated with rigid quotas.

Legal Environment

      In Canada, legislated employment equity exists mainly in the federal jurisdiction which covers about 5 to 10 percent of the Canadian workforce in “inter-provincial” federally regulated areas such as banking, transportation and communication as well as in federal Crown corporations. The legislation, which applies to organizations of 100 or more employees, was established through the federal Employment Equity Act of 1986, amended in 1996 to also cover federal employees. The Federal Contractor’s Program (FCP), established in 1986, also requires similar employment equity initiatives for firms of 100 or more employees who bid on federal contracts of $200,000 or more. Following the recommendations of the Abella Commission, there are four designated or target groups: women, visible minorities, disabled persons, and Aboriginal persons.

      Enforcement under the federal legislation is generally regarded as weak. Penalties under the legislated program exist only for failing to file a report with the Federal Human Rights Commission, and these are minimal (maximum of $10,000 for a single violation and $50,000 for repeated violations). There are no penalties for failing to establish or implement employment equity. The main sanctions are through the “court of public opinion,” since the reports are made public and the Commission can initiate a complaint. This pressure can be important, since many of these organizations are large, publicly visible and often publicly accountable--thereby sensitive to their image. Sanctions under the Federal Contractors program also appear to be minimal. A recent evaluation¹ indicated: “No employers have recently been prevented from bidding on a new federal contract because of non-compliance, although many do little or nothing to fulfil their . . . commitments.”

      At the provincial level, employment equity has existed in Quebec since 1985 for government departments and agencies. It can be part of a remedy imposed by the Human Rights Commission following an investigation after a complaint. British Columbia, Saskatchewan and Manitoba also have employment equity for their public servants (Antecol and Kuhn 1999: S31). In Ontario in 1993, the New Democratic Party passed a provincial Employment Equity Act. However, before it became enacted it was repealed in 1995 by the Progressive Conservative Government, highlighting the controversial nature of such legislation. Employment equity requirements can also be imposed as part of court ordered remedies for complaints brought before provincial human rights tribunals, although such procedures are rare in Canada (unlike the United States). This could reflect a Canadian emphasis on mediation and conciliation through tribunals rather than litigation through the courts, as well as the absence of a civil rights movement, with its emphasis on civil liberties protected through the courts.

      At the local level, employment equity is often part of city or municipal ordinances for local governments, and it has been voluntarily adopted by some government departments. These voluntary initiatives, when registered with the Human Rights Commissions under the exemption provisions of the legislation, have generally been sanctioned by the courts as not constituting reverse discrimination (Jain and Hackett 1989).

      The United States has a much more extensive history of affirmative action initiatives mainly as part of court ordered remedies or negotiations with enforcement agencies under the statutory provisions of Title VII, the Equal Employment Opportunity (EEO) provisions of the Civil Rights Act of 1964. As well, it is part of federal contract compliance under various Executive Orders and regulations established in the 1960s. The affirmative action initiatives were initially directed at blacks (reflecting the political pressures of the civil rights movement), but in the 1970s this was broadened to include women. Enforcement through the courts meant that implementation was subject to the social norms as interpreted through the courts, as well as the political decisions to appropriate budgets to enforcement agencies. This meant that the vigorous application of the 1960s and 1970s under the impetus of civil rights and anti-discrimination was somewhat displaced by the more conservative and deregulatory agendas of the 1980s.

      In general, court decisions in the United States have also interpreted voluntary affirmative action decisions as not constituting reverse discrimination as long as the initiatives pass a two-pronged test established in United Steelworkers of America v. Weber, 443 U.S. 193 (1979). The two-pronged test is that the affirmative action plan must (1) have purposes that mirror those of the statutes, and (2) do not unnecessarily trammel the interests of nonminority employees. A similar test applies to affirmative action plans initiated by government actors.

Rationale

      In both Canada and the United States, the rationale for affirmative action initiatives was similar--to offset the legacy of the cumulative history of discrimination, including systemic discrimination that was the (often unintended) byproduct of other policies and practices. Even for economists, who tend to be noninterventionist in markets, there may be some appeal. A true equality of opportunity (emphasized by economists) may require compensatory policies to ensure a fair and competitive race, given the already unequal starting points--in a world of “second-best” it may be necessary to offset other constraints. The emphasis on results (representation of the designated groups in the firm’s workforce) leaves it up to the firm as to how best achieve those results. The increased demand for the designated groups should increase both wages and employment, in contrast to equal pay policies, which could reduce employment as a result of the wage fixing. The increased demand by employers should also filter down to education and other institutions to augment their supply of designated groups. Affirmative action initiatives could also be temporary and short-lived, with their need being reduced as the designated groups establish their own networks, mentors and role modes, and stereotypes dissipate through experience and interactions.

      Of course, there may also be downsides. The designated groups may feel stigmatized as receiving their job or promotion only because of their group status. They may be placed “over their heads” if qualifications are bypassed, with failures reinforcing stereotypes. Backlashes can also result if more qualified groups are bypassed by less qualified designated groups. Clashes can occur over other principles of fairness, such as seniority, if employment equity takes precedence over these rules.

Mechanics or Steps Involved

      Employment equity tends to involve four basic steps. First, an internal audit is conducted within the firm to determine the internal representation and position of the designated groups within the firm. Second, the external availability of the designated groups is determined by documenting their representation in the relevant external labor market, often through census data, with notions of the qualifications and the appropriate labor market from which the firm can reasonably be expected to draw, obviously being contentious issues. Third, targets or goals are established to achieve an internal representation that is representative of the external availability of the designated groups. Fourth, a plan and timetable is established for achieving those targets. The plans can involve strategies pertaining to such dimensions as: recruitment, retention and promotion; internal education and awareness campaigns; outreach strategies; identification of barriers, especially unintended, systemic practices; mentoring; and reasonable accommodations as appropriate.

Relationship to Collective Bargaining

      There has always been an “uneasy tension” between employment equity and collective bargaining. Employment equity can conflict with collective bargaining, especially if the employment equity initiatives take precedence over rules like seniority.² In situations like construction, where unions can be involved in the hiring hall and in setting apprenticeship requirements, the employment equity initiatives can be directed at union behavior. Unions can be jointly liable with employers “for discrimination that is caused by the terms of the collective agreement” [Cornish, Schucher and Pask 1988, chap. 3, p. 5; Renaud v. Central Okanagan School District 23, (1992) 2 S.C.R. 970].

      Unions, however, can be an important complement to legislative initiatives like employment equity. They can help initiate claims and protect workers against reprisal by management. They can inform workers of their rights and obligations under the law and help explain complexities of legislation. They can be part of joint labor–management committees to deal with issues such as internal education and awareness campaigns, outreach strategies, identification of barriers, and reasonable accommodation adjustments.

      Importantly, unions can enshrine the legislative requirements into the collective agreement. This would initially appear as redundant in situations where the requirements are legislated, since the legislation takes precedence over collective agreement provisions. Even in these situations, however, enshrining the legislation into the collective agreement can still serve important functions. First, it can make workers more aware of the initiatives. Second, it can provide a degree of institutional continuity, since the collective agreement provisions would still exist if the legislation is rescinded. Third, it can make contentious issues over the legislation subject to the grievance procedure. Fourth, it can facilitate determining the trade-offs that may be involved in areas where the legislation and agreement may conflict, as with respect to seniority rights. Fifth, if the requirements are not legislated, then they are enforceable through the collective agreement and its ancillary apparatus.

      Affirmative action/employment equity provisions are not commonly enshrined in collective agreements in Canada, although they are increasing (Jackson and Schellenberg 1999: 266). The extent of affirmative action provisions increased from covering 5.9 percent of employees in 1985 to 11.8 percent by 1998.³ This contrasts to antidiscrimination provisions in general, which were more prominent but did not increase much (from 56.1 percent in 1985 to 60.5 percent by 1998) and equal pay provisions, which started off at the same low level but increased much more rapidly (5.4 percent in 1985 to '.6 percent by 1998).

Evaluations

      Evaluations⁴ of the affirmative action initiatives in the United States generally found positive results for the target groups (although often at the mild expense of the non–target groups), with those results improving with stronger enforcement and expanding firms, and when high-level management supported the initiatives. Employers often indicated that the initiatives led to improved utilization of human resources in general, usually as a result of reassessing their overall human resource practices within the organization. Importantly, Holzer and Neumark (2000) cite two of their other papers, which find that affirmative action does lead to compromises in formal qualifications of target groups at the hiring stage, but this is more than offset by the more intensive search, evaluation and training efforts at the recruiting stage, such that the target group employees have better unobserved informal qualifications. The end result is that their performance is similar to or slightly better than that of the non–target employees.

      In Canada, the few studies that have been done of the impact of the federal employment equity initiatives tend to find small positive effects on the wages and occupational advance, mainly for women and visible minorities.⁵ The most recent study, however, found no impact after the mid-1990s, attributable in large part to reduced enforcement.⁶ Jain and Hackett (1989), for example, found that only about one-third of the organizations that were subject to employment equity had what they categorized as an effective implementation procedure in place.

Relationship to Related Policy Initiatives and Practices

      Employment equity and equal pay initiatives are generally regarded as complementary. Without equal pay policies, the target groups may be hired and promoted, but with little regard for the pay they receive. Similarly, without employment equity initiatives, equal pay policies may reduce the employment opportunities of the groups to which they apply, given the higher wages. As indicated previously, however, economics would emphasize that equal pay may be a natural byproduct of the increased demand for the designated groups; in that vein, it may be a substitute for equal pay policies.

      Issues pertaining to diversity management at the workplace are obviously related to employment equity. There is increased recognition that the former challenges of diversity management at the workplace may increasingly give rise to opportunities, given the diversity that prevails with respect to customers, suppliers, and global markets. In essence, employment equity can be good business practice in the global economy and diverse workforce.

      Family-friendly workplace practices that are increasingly emphasized may also be complementary to employment equity policies, especially in reducing the systemic, unintended barriers that may have been part of the rationale for employment equity in the first place. Flexible worktime arrangements, leaves and childcare arrangements may reduce the burden of balancing work and family faced by many women--a burden that may be even more prominent in the future as issues of eldercare grow in importance. Many of these workplace issues may also reduce barriers faced by disabled persons.

      Increased emphasis also tends to be placed on assisting employers in identifying barriers that inhibit the more natural attainment of employment equity, without the formal representational requirements. As well, with the growing emphasis on human rights and antidiscrimination issues with respect to a wide range of enumerated grounds (age, sexual orientation, religion, marital status, criminal record), there is questioning of the merits of special employment equity initiatives for specific target groups.

      Obviously, the ideal arrangement is one where employment equity has become unnecessary or has outlived its usefulness given the increased emphasis on such initiatives as diversity management and family-friendly workplace practices, as well as any initial impact that employment equity already may have achieved. While there is unlikely to be agreement as to whether this is the case, this is likely to be the focus of the future debate on employment equity.

Endnotes

1. Unpublished report cited in the Toronto Star, July 13, 2001, p. A03.

2. In the federal employment equity legislation in Canada, seniority is not deemed to be a barrier to employment equity unless it is determined to be an overtly discriminatory practice under the Canadian Human Rights Act. If seniority is deemed to have an adverse impact, however, the employer and employee representatives are required to consult with each other to minimize the adverse impact. Few decisions exist on the possible clash between seniority and employment equity (Cornish, Schucher and Pask, 1998, ch. 3, p. 17).

3. Special cross-tabulations provided to us by the Workforce Information Directorate of Human Resources Development Canada indicate that by December 2001, 29.7 percent of employees covered by collective agreements had provisions pertaining to employment equity in their collective agreement. This suggests that the upward trend for the inclusions of such provisions is still increasing. Differences in the coding of such provisions as well as in the procedures for sampling the agreements over time, however, suggest that caution should be used in determining trends.

4. Reviews are contained in Gunderson (1989), Leonard (1989, 1990), and Holzer and Neumark (2000).

5. Eight studies are reviewed in Gunderson (1998:17), most of which involved surveys or tabulations of data rather than formal econometric evaluations. In a recent study, Antecol and Kuhn (1999) report that employment equity also improves the re-employment probability of women who are laid off.

6. Unpublished report cited in the Toronto Star, July 13, 2001, p. A03. The lack of enforcement is also emphasized in Baines (2000).

References

Abella, Rosalie. 1984. Equality in Employment: A Royal Commission Report. Ottawa: Supply and Services.

Antecol, Heather, and Peter Kuhn. 1999. “Employment Equity Programs and the Job Search Outcomes of Unemployed Men and Women.” Canadian Public Policy, Vol. 25, Supplement, no. 1.

Baines, Beverley. 2000. “Occupational Sex Segregation and Employment Equity: Lessons from Canada.” Canadian Labour and Employment Law, Vol. 8, no. 2.

Cornish, Mary, Karen Schucher, and Amanda Pask. 1998. Canadian Labour Congress Trade Union Guide to the Federal Employment Equity Act. Toronto, ON: Cavalluzzo, Hayes, Shilton, McIntyre, and Cornish.

Gunderson, Morley. 1989. “Male-Female Wage Differentials and Policy Responses.” Journal of Economic Literature, Vol. ', no. 1 (March), pp. 46–72.

Gunderson, Morley. 1998. Women and the Canadian Labour Market. Toronto: ITP Nelson.

Holzer and Neumark. 2000. “Assessing Affirmative Action.” Journal of Economic Literature, Vol. 38, no. 3 (September), pp. 483–568.

Jain, Harish, and Richard Hackett. 1989. “Measuring the Effectiveness of Employment Equity Programs in Canada.” Canadian Public Policy, Vol. 25 (June), pp. 189–204.

Jackson, Andrew, and Grant Schellenberg. 1999. “Unions, Collective Bargaining and Labour Market Outcomes for Canadian Working Women: Past Gains and Future Challenges.” In Richard Chaykowski and Lisa Powell, eds., Women and Work. Kingston: McGill-Queen’s University Press, pp. 245–82.

Leonard, Jonathan. 1989. “Women and Affirmative Action.” Journal of Economic Perspectives, Vol. 3, no. 1 (Winter), pp. 61–75.

Leonard, Jonathan. 1990. “The Impact of Affirmative Action and Equal Employment Law on Black Employment.” Journal of Economic Perspectives, Vol. 4, no. 4 (Fall), pp. 47– 63.