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Canada Post and its biggest union have been given until the end of August to reach an agreement in a long-standing pay equity dispute that could end up costing the post office millions of dollars.

After hearings that spanned four months this year, arbitrator Maureen Flynn on Thursday gave the Crown agency and the Canadian Union of Postal Workers 90 days to negotiate a settlement in the complicated dispute, which is rooted in perceived pay inequities between mostly male urban carriers and their majority female rural and suburban counterparts.

If no settlement is reached by Aug. 31, the case could go back to arbitration in the fall for a final determination, Flynn said in her 176-page decision.

But the union is already hailing the ruling as a “historic” victory for women because Flynn’s report rejected how Canada Post calculates compensation rates for it rural workers, known as RSMCs.

The corporation’s methodology “is not reasonably accurate nor is it reliable,” Flynn determined.

“Rather, it is fundamentally flawed and, consequently, produces so-called compensation results that do not correspond to the employees’ respective realities in light of all the evidence that was adduced in this case.”

While the case could have a significant effect on thousands of women who work for the post office in some of the country’s more remote regions, thousands of men employed as carriers outside the big cities stand to benefit as well.

The numbers of male workers employed as RSMCs have increased steadily since they won their first collective agreement with Canada Post in 2003, the union said.

Cathy Kennedy, who was part of the union’s three-member panel on pay equity, said she was pleased with the ruling in that it gives both sides in the dispute a solid base from which settlement talks can proceed.

She said arbitration has shown itself to be a much more efficient process for fighting pay equity claims than going through other mechanisms, she said.

“It shows that this process can move faster than what the Human Rights Commission has been facing,” Kennedy said, noting that the Canadian Postmasters and Assistants Association launched a pay equity complaint with the commission in the 1990s that is still ongoing.

CUPW had argued that the Crown agency’s roughly 8,000 rural and suburban carriers — two thirds of whom are women — have been underpaid compared with their mostly male urban cousins, by about 25 per cent.

The union also pegged the hourly wage gap at $9.72 per hour — a figure the arbitrator said was in question.

Doing the simple math based on that amount, the overall gap for 8,000 employees could exceed $150 million.

But a final dollar figure could be much lower since indirect compensation, such as retirement and other benefits, as well as vacation, would have to be taken into account said Kennedy.

Canada Post saw before-tax earnings of $74 million last year, largely due to unprecedented growth in its parcel business. Its parcel revenue exceeded $2 billion in 2017 for the first time.

Letter mail volumes, however, have been declining for several years. The carrier said Canadians mailed two billion fewer pieces of domestic letter mail in 2017 than they did a decade earlier.

The agency didn’t directly respond Friday when asked if it had calculated the potential cost of a settlement.

Canada Post has maintained the compensation structures for the two sets of workers are unique in that urban carriers are paid by the hour while rural and suburban employees are paid based largely on the number of delivery stops they make and how far they have to travel.

Still, the corporation said Friday it was prepared to sit down soon with CUPW in hopes of reaching an agreement, adding that it considers pay disparity based on gender “wholly unacceptable.”

“Canada Post is committed to moving quickly to follow the instructions provided by arbitrator Flynn to resolve this matter,” the agency said in a statement.

Opposition New Democrats said the arbitrator’s ruling demonstrates the need for a pay equity law.

“The fact that Canada Post workers are still fighting shows how badly we need proactive federal legislation,” said NDP equality critic Sheila Malcolmson.

“Women are tired of waiting.”

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