Ch. 3: Diversity, Inclusion, Equity and the Law

Learning outcomes

1. Interpret the main social factors that shape how the workforce develops.
2. Explain how Canada's federal and provincial legal systems for employment law are separate, shared and integrated.
3. Describe the distinction between direct and indirect discrimination.
4. Define four terms: bona fide occupational requirements, job relatedness, undue hardship and the duty to accommodate.
5. Apply the steps organizations take to secure employment equity.

3.1 Introduction: employment legislation for employers

Canadian employers work within a set of federal and provincial laws that shield employees, encourage fair business conduct and foster safe and equitable workplaces. Employment laws define minimum standards on wages, hours, leave, safety, human rights, accessibility, privacy and well-being. They form the basis for ethical and legal employment, lower risk for the organization, reinforce culture and guarantee consistent treatment. It is the HR practitioner's job to ensure the employer respects this framework, and since the law keeps evolving along with technology, demographics and employment practices, they must remain informed and act proactively.

Together these laws shape every stage of employment: recruitment, onboarding, daily operations, performance management and termination.

3.2 Diversity, rights, ethics and work-life balance

HRM is about people, who bring feelings, emotions, perceptions, values and prejudices and are often unpredictable. HR processes must be sensitive to how people and society change, both slowly and suddenly (COVID-19).

Diversity. The Canadian workforce has changed dramatically in 70 years: in the 1950s more than 70% of workers were male.

Canada is multicultural and diversity is legally protected; mismanagement in recruiting, hiring, advancement, discipline and firing has legal consequences. But the reasons go beyond compliance and even beyond ethics: diversity is simply good business. A firm cannot afford to limit its talent pool arbitrarily. The book's example: a hockey team that only hires players who love Death Metal (say 20% of people) excludes 80% of available players and will hardly ever win the Stanley Cup. Exclusion should only be based on characteristics proven to relate to performance (for hockey: skating, puck handling, vision).

Evidence that diversity pays:

• Herring (2009), Does Diversity Pay?: firms with more racial diversity had higher sales revenue, more customers, larger market share and higher relative profits than homogeneous firms.
• Page (2007), The Difference: people from varied backgrounds work together more effectively because they bring different approaches and perspectives to solutions.
• Eric Foss (CEO Pepsi Beverages): diversity is "not a fad" but directly linked to business strategy.
• Adler (2001): a 19-year study of 215 Fortune 500 companies found a strong correlation between female executives and high profitability.
• Project Equality: firms rated low on equal opportunity earned 7.9% profit, those rated highest 18.3% (Lauber, 2011).

Rights and ethics. Rights are principles of freedom and entitlement, whether legal, social or ethical. Ethics examines how moral judgments are justified: what counts as right or wrong, fair or unfair. Employees know more than ever before and, with the help of social media, display employee militancy: they are loyal to an organization yet speak out when it falls short of their values or ethics. The focus of militancy has shifted from workers' rights (higher pay, gender equity) toward pressing for a better society, for example Facebook staff holding a virtual protest about Donald Trump's inflammatory posts. Topics employees care about:

• Sustainability: Amazon employees organized an online walk-out over the company's climate stance.
• Privacy: Humanyze makes sensor badges (microphones for tone and volume, accelerometer for sitting or standing, Bluetooth and infrared for location and face-to-face contact). Such technology threatens privacy and employees increasingly challenge it in court.

Work-life balance is the balance people seek between their professional and personal lives. Research links it to a healthy work environment; it supports mental and physical health and personal relationships, reduces stress and helps prevent burnout. Employer programs include flexible hours, onsite gyms and daycares and time off. Some employers overcompensate with game rooms and beanbags to be "millennial-friendly" (e.g. WeWork), but these blur work and life boundaries and many employees do not value such perks. A better answer is a flexible work environment that meets most employees' balance needs.

3.3 Federal human rights laws

Laws reflect a society's changing values. The HR manager needs to understand business law, employment law and legislation, and how to attract and retain quality employees. Employers and employees have mutual expectations:

The legal framework is a formal expectation: it prevents exploitation of employees and protects employers from bad practices by employees. Government balances the relationship.

Canadian Charter of Rights and Freedoms. Canada's supreme law is the Constitution Act of 1982. It made Canada fully independent (Britain no longer has to approve changes to the Constitution) and anchored the Charter, which protects basic rights including freedom of speech, press, assembly, association and religion.

Canadian Human Rights Act (CHRA). Protects against intentional and unintentional discrimination at work; people can turn to the federal government when harassed or discriminated against on a protected ground. In effect since March 1978.

Example of protected grounds in practice: a student in a diploma program who needs accommodation to complete coursework.

Harassment is behaviour that annoys or troubles another employee: verbal abuse, bullying, jokes, faces or comments, in person or on social media. Types: physical, verbal, sexual and emotional. Example: an English-speaking employee mocking a colleague's foreign accent.

According to its purpose statement, the CHRA aims for every person to have an equal chance to build the life they can and want to lead, with their needs met and free of discriminatory practices. For HRM this implies: (1) taking their wishes and abilities into account, everyone should have an equal opportunity to work; (2) discrimination on the listed grounds may not stand in the way of that opportunity. The list is precise and evolves with society, and genetic testing is a hot topic right now (e.g. can insurers refuse people who carry a gene mutation that increases the chance of a hereditary disorder? This is under debate, also at the Supreme Court).

Enforcement of the CHRA. The CHRA applies only to federal government departments and agencies, Crown corporations and federally regulated businesses such as banks, airlines and communication companies. Their employees file complaints with the Canadian Human Rights Commission (CHRC). First, mediation is tried. If it fails, the Human Rights Commissioner can:

• refer the case to the Canadian Human Rights Tribunal;
• route it to conciliation;
• postpone a ruling and ask for further information and analysis; or
• dismiss the complaint.

Tort law. Comes from Canada's British heritage and is a foundation of the legal system. It is private law that compensates people who are injured or whose property is damaged by others, acting as a punishment through damages (including money for pain and suffering).

Tort law evolves: examples are "no fault" car insurance, invasion of privacy, and negligence by professionals such as lawyers and engineers.

3.4 Provincial human rights laws

Organizations not covered by the CHRA fall under provincial human rights laws. Canada has 14 jurisdictions: 10 provinces, 3 territories and the federal jurisdiction (Crown corporations, civil service, banking, communication). About 90% of equity law enforcement is provincial and 10% federal. Provincial laws resemble the federal law but vary: Quebec was first to protect sexual orientation (1977), Alberta last (2009).

The Ontario Human Rights Code gives every person the right to freedom from discrimination in five social areas: services, goods and facilities; housing; contracts; employment; and membership in vocational associations and trade unions.

These protections are not universal; they reflect their society. In the US, protections considered basic in Canada have been challenged in court; the Supreme Court recently upheld protection of LGBTQ workers by a 6 to 3 margin.

Enforcement. Employees covered by the Ontario Code file complaints directly with the Human Rights Tribunal of Ontario (HRTO), which handles them by mediation or a hearing.

Laws that affect Indigenous persons: the Employment Equity Act, Section 35 of the Constitution Act (which sets a duty to consult) and UNDRIP, i.e. United Nations Declaration on the Rights of Indigenous Peoples.

3.5 Discrimination in organizations

Discrimination laws do not forbid distinguishing between people in general; they only forbid it on certain characteristics. The CHRC defines discrimination as an action or decision that treats a person or group badly for reasons such as race, age or disability. People differ in countless ways (height, eye colour, personality, favourite ice cream); you may decide on most of these, but not on the handful society deems unacceptable, such as gender or race. It gets complicated with criteria like height, weight or postal code, which are not protected but can still discriminate indirectly. Because HR makes hiring, evaluation, promotion and termination decisions, it needs a sophisticated understanding of how discrimination occurs.

Direct discrimination applies both ways: using a protected category is illegal even if the decision favours the minority group (e.g. a bank employee who claimed he was denied promotion because he is not gay). Indirect discrimination means treating someone the same as everyone else, while that treatment harms them because of a protected characteristic.

How can a business still function? Discrimination is not unlawful when the organization can objectively justify a criterion by business necessity, job relatedness or a bona fide occupational qualification (BFOQ).

Job relatedness requires that employment decisions be based on the requirements of the position: criteria for hiring, evaluating, promoting and rewarding must be directly tied to the job. A rule that warehouse workers be at least 175 cm is legal if the employer proves height matters for the job, even though fewer women are hired. Proving it is often complicated and subjective. Baltej Singh Dillon case (1988): a Sikh who met all RCMP entrance requirements was barred by a dress code that forbade beards and turbans. The rule was discriminatory and could not be linked to performance as an RCMP officer; it would only have been acceptable if the RCMP had proved job-relatedness.

Examples: a blind person cannot drive a taxi; only women are cast in a commercial for women's hygiene products. The Supreme Court of Canada set three criteria for a standard to be a BFOR and not discrimination:

1. Connected to performance of the job: the standard exists for safety and the ability to do the job (e.g. a construction worker must lift 40 pounds).
2. Honesty and good faith: the employer introduced the standard sincerely and in good faith as a genuine reason for getting the work done (the book contrasts this with an employer that misuses its power under the employment contract).
3. Accommodation is not reasonable: the work cannot be done without undue hardship (e.g. extraordinary financial burden, or health and safety).

Accepted BFOQs: Catholic school teachers must be Catholic (religion), mandatory retirement age for airline pilots for safety (age), a men's clothing maker advertising for male models (gender). Legitimate BFOQs are rare and often end up in court because they are not black and white (should male guards work in women's prisons, may a French restaurant hire only French chefs?).

Duty to accommodate. Courts add an obligation: employers and service providers must adjust rules, policies or practices so individuals can participate fully. Sometimes treating someone differently is necessary to prevent discrimination, especially for physical disabilities. Examples: an employee with a speech impairment need not answer the phone; the employer can drop that duty and have them do filing for their coworkers instead; an employee needing dialysis one or two days a week can get a 3-day contract, make up hours on weekends or work from home.

Examples: Saputo can afford assistive listening devices (microphone, amplifier, earpiece) for a hearing-impaired employee; a local dépanneur (corner store) could not. An employee with macular degeneration can easily be accommodated as an office worker, but not as a truck driver because of safety.

Sexual and psychological harassment. All employees are entitled to a workplace without psychological harassment. Employers have to act reasonably to prevent it and to end it once they learn of it, and they must put in place and share a harassment prevention and complaint processing policy. Psychological harassment also covers sexual remarks, acts or gestures (CNESST, 2021). Every one of these elements has to be present:

All employers must: (1) Policies: create or revise anti-harassment policies covering both psychological and sexual harassment; (2) Complaints: have clear, consistent internal processes for complaints; (3) Implement new or revised policies as soon as possible; (4) Communicate: make them available to all employees. The #metoo movement changed attitudes towards sexual harassment. At Ubisoft (large Montreal studio) a scandal over sexual, emotional and professional abuse by top managers in a male-dominated culture led to the firing of the Montreal studio head, top producers and the VP HR. Such scandals can ruin organizations; HR must put preventive processes in place, especially now that social media gives employees a public platform.

Company-specific code of ethics. Many organizations do more than the law requires. A code of ethics is a policy that steers the company and its staff toward honest conduct and integrity in everyday work and encourages actions that help society. Some companies appoint an ethics officer reporting to the CEO or the HR executive. For example, CAE (a simulation and training firm based in Montreal) expects its staff to meet the highest standards of integrity, honesty and ethics and to "have the wisdom and courage to do the right thing".

3.6 Employment standards and employment equity

HR and managers are often reactive; effective HRM takes a proactive approach focused on education and prevention.

Employment standards legislation sets the minimum rights employers must give employees (the rights of employees and responsibilities of employers). All employees in Canada are covered. It includes minimum wage, paid holidays and vacation, maternity, adoption and parental leave, bereavement, compassionate care, termination, overtime and other conditions.

Both cover minimum wage, hours of work, overtime, vacation etc., with slightly different language and rules. Each province has its own version (a Code, Act or Labour Standard), so the key question for HR is: "What legislation governs this employer?" Practitioners use Your Guide to the Employment Standards Act for interpretation.

Employment Equity Act. The Charter requires employment equity programs, which go beyond human rights laws by protecting against discrimination and preventing future discrimination. Certain groups faced lower wages, employment segregation, higher unemployment, lack of promotion and underemployment. The Employment Equity Act is federal legislation that addresses the employment barriers faced by four designated groups:

1. Women
2. Visible minorities: people who are not Caucasian by race or not white in colour
3. Aboriginal peoples: First Nations (Indians), Métis or Inuit
4. Persons with disabilities: disabilities of a long-term nature, whether physical, sensory, mental, psychiatric or learning-related

HR and the employment equity plan. The Act requires employers to create equity plans; HR plays a major role. The plan includes:

1. A strong commitment from senior officials.
2. A workforce analysis of underrepresentation of the four groups; only employees who self-identify are counted.
3. A review of policies and practices to identify employment barriers.
4. An employment equity plan with positive practices in the short term (1 to 3 years) for hiring, training, retaining and promoting designated group members, with timetables, plus longer-term goals for representation (operational plan, implementation, monitoring, evaluation, revisions).

Implementation of employment equity: six steps

Pay equity for women. Laws against wage discrimination by gender exist at both federal and provincial level. According to Forbes, Canada had an 18.2% pay gap (McCarthy, 2018), and in 2020 women made on average 89 cents for each dollar earned by men. Since 31 August 2021 the federal Pay Equity Act has applied: every federally regulated employer with 10 or more employees has to take active steps on pay equity between jobs held mainly by women and jobs held mainly by men.

Employer accommodations for persons with disabilities, for example: interpreters for deaf and hearing-impaired employees; telecommunication teletype (TTY); print materials in alternative media such as braille or large print; a workspace suited to the disability.

3.7 Key terms

BFOQ, code of ethics, direct discrimination, diversity, duty to accommodate, ethics, harassment, human rights legislation, indirect discrimination, intentional torts, job relatedness, protected grounds, rights, tort law, torts of negligence, undue hardship and work-life balance. All are explained above.

3.8 Summary

HR processes must adapt to a diverse workforce, both for legal compliance and because diversity pays (higher sales, more customers, larger market share, higher profits, better problem solving). Employees are better informed and speak up about rights, ethics, sustainability, privacy and work-life balance. The Charter and the CHRA guarantee fundamental rights and protect against discrimination on protected grounds, with a complaint process through the CHRC; other employers fall under provincial codes and tribunals. Discrimination can be direct or indirect; it may be lawful only with job relatedness, business necessity or a BFOR meeting the three Supreme Court criteria. Employers have a duty to accommodate up to undue hardship, must prevent and address sexual and psychological harassment, follow employment standards (CLC or ESA) and, under the Employment Equity Act and Pay Equity Act, remove barriers for designated groups and ensure pay equity.