Two-Tier Workplace Compensation: Issues and Remedies

Canadian Labour and Employment Law Journal, Forthcoming

32 Pages Posted: 7 Mar 2013

See all articles by Michael MacNeil

Michael MacNeil

Carleton University - Department of Law

Date Written: March 6, 2013


As a result of the recession in 2008, many employers are looking for ways to cut labour costs. One way of doing so is to impose two-tier compensation schemes where older and younger employees do essentially the same job for different wages and benefits. The key concern of this paper is how Canadian labour, employment, and human rights legal regimes could respond, if at all, to the differential impact of two-tier schemes on younger workers. In Part I of the paper, the author recounts the use of two-tier systems in the United States and Canada. He shows that their use not only affects workers’ wages, but also their benefits and pensions as employers move from defined benefit to defined contribution plans. In Part II, he analyzes arbitral, labour board and human rights tribunal case law concluding there are significant barriers to legal recourse for workers in the lower, younger tier through duty of fair representation or human rights complaints. The author ends the paper with an overview of Quebec employment standards legislation, and debates whether similar legislation would be effective in English Canada. He highlights the narrow scope of the Quebec legislation and barriers to enacting a similar statute elsewhere.

Keywords: labour law, employment law, Canada, duty of fair representation, compensation, pensions, discrimination, intergenerational equity

Suggested Citation

MacNeil, Michael, Two-Tier Workplace Compensation: Issues and Remedies (March 6, 2013). Canadian Labour and Employment Law Journal, Forthcoming. Available at SSRN:

Michael MacNeil (Contact Author)

Carleton University - Department of Law ( email )

Ottawa, Ontario K1S 5B6
613-520-2600 x 3684 (Phone)


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