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Gender bias in severance pay?

Posted On: January, 21 2015

Pay equity is about “equal pay for work of equal value” according to the Pay Equity Commission of Ontario.  However, the Commission also recognizes that a persistent inequity continues to exist between men and women, which the Commission refers to as the “Gender Wage Gap.”  According to recent studies by University of Victoria professor Ken Thornicroft, inequity also exists in the world of severance pay in wrongful dismissal cases in Canada.

At common law in Canada, an employer must either provide reasonable notice to an employee who is being fired without cause, or provide pay in lieu of that notice.  The rationale behind this is to provide time for a terminated employee to obtain comparable employment somewhere else.  To determine how long the notice period should be, Canadian courts often look to the classic Bardal factors of (1) character of employment; (2) length of service; (3) age of employee; and (4) availability of alternative employment.

Surprisingly, it turns out that when cases considering the Bardal factors are analyzed, a recent study by Professor Thornicroft shows that courts award more notice and severance to men than to women.

The Victoria, B.C., Times Colonist and The Toronto Star have both recently reported on this news.  In one study conducted by Professor Thornicroft, which looked at wrongful dismissal cases in Canada from 2000 to 2011, he found that on average women received 1.7 months less in notice and severance pay than men.

Although this study, as reported, does not provide an explanation for why this is the case, Professor Thornicroft suggests that it may be a result of an unconscious bias reflecting society’s views more generally.  He advocates for a legislated formula to determine wrongful dismissal damages that could account for this type of pay inequity.

 

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