Detailed Equity Considerations for SERLO / Considérations détaillées en matière d’équité pour le SERLO
Introduction
This evergreen document has been developed collaboratively by Government of Canada Employment Equity (EE) Networks to provide a comprehensive and equity‑informed interpretation of the 14‑step Selection of Employees for Retention or Lay‑Off (SERLO) process established by the Public Service Commission (PSC). Its purpose is to support departments and agencies in carrying out SERLO exercises that meet all legislative and policy requirements while also aligning with best practices in equitable workforce management.
While the PSC prescribes the mandatory procedural steps for SERLO, EE Networks recognize that the context in which these decisions occur evolves constantly. Demographic patterns shift, labour‑market availability changes, accessibility obligations expand, and new understandings of systemic barriers emerge. This evergreen document therefore integrates updated analytical methods, robust risk‑mitigation controls, and strengthened documentation standards so that the guidance remains relevant, adaptable, and future‑proof across multiple SERLO cycles.
The guidance reflects the lived expertise and professional knowledge of EE Networks. Throughout all 14 steps, decisions should be transparent, defensible, and informed by strong evidence. They should also remain consistent with the requirements and intent of the Employment Equity Act, the Accessible Canada Act, and the Official Languages Act, while supporting the identification and removal of systemic barriers and upholding fairness, dignity, and respect for all employees.
This document begins with Step 1—Determining the Desired Current and Future State of the Organization—because inaccuracies or biases introduced at Step 1 shape the entire SERLO process and cannot be fully corrected later. Each subsequent step follows the same structure: clarifying PSC requirements, highlighting equity risks, and describing practical mitigation controls.
STEP 1 — Determine the Desired Current and Future State of the Organization
Legislative and Policy Framework
This step is grounded in several legislative and policy instruments, including section 64 of the Public Service Employment Act (PSEA), section 22 of the Public Service Employment Regulations (PSER), the PSC’s Selection of Employees for Retention or Lay-Off Guide, the Employment Equity Act, the Accessible Canada Act, the Official Languages Act, and the Workforce Adjustment Directive (WFAD). Together, these authorities govern the conditions under which a SERLO can be initiated and shape the obligations that apply to employers during restructuring.
1. What This Step Is
Step 1 establishes the operational basis for initiating a SERLO. It begins when the Deputy Head determines that the services of some, but not all, employees in a defined part of the organization are no longer required because of a lack of work, the discontinuance of a function, or an organizational restructuring authorized under PSEA section 64.
1.1 Determinations Required Before Any Assessment
Before employees can be assessed, the organization must determine what work will continue and what work will cease or be reduced in the future state. It must also specify which functions will be required, how many indeterminate positions will be needed to perform the ongoing work, and which knowledge, skills, experience, and language requirements will be necessary for those future-state positions.
1.2 Environmental Scan Requirements
The PSC Guide specifies that these decisions must be informed by an environmental scan that includes a workforce analysis, a skills‑gap analysis, and an examination of representation rates for designated Employment Equity groups in the affected area.
1.3 Structural Foundation Reminder
Because Step 1 establishes the foundation for everything that follows, early misinterpretations—especially concerning representation and labour‑market context—create distortions that later equity controls cannot fully correct.
2. Required Actors
2.1 Accountable Authority
The Deputy Head serves as the accountable authority for initiating SERLO under PSEA section 64.
2.2 Operational Lead
A delegated manager, operating under sub‑delegated staffing authority, leads the SERLO at the operational level.
2.3 Required Support Functions
A range of corporate support functions must contribute formally and provide documented input. These include HR Workforce Planning, HR Analytics, Employment Equity and Diversity and Inclusion units, Accessibility and Duty‑to‑Accommodate specialists, Official Languages advisors, Classification advisors, and Finance or Corporate Planning. Each function plays a specific role in ensuring the decision is evidence‑based, compliant, and well‑documented.
3. Mandatory Documentation — Step 1 Decision Record
A formal Step 1 Decision Record must be created and retained in the SERLO master file. This record must include several components.
3.1 Future State Rationale
The organization must describe the programs or services that will be discontinued, reduced, or restructured; identify the authority for the change (such as a Departmental Plan, Treasury Board decision, budget reduction, or mandate shift); specify the number of positions required in the future structure; and include an organizational chart of the future state.
3.2 Workforce Snapshot
The current-state overview must identify the total number of indeterminate employees in the affected area, describe their group‑and‑level distribution, show their geographic locations and official‑language profiles, and outline the representation rates for women, Indigenous peoples, persons with disabilities, and members of visible minorities.
3.3 Comparison Benchmarks
The record must list the departmental representation baseline, the official Workforce Availability (WFA) values used for comparison, the census year from which those values are drawn, and the definitions used for each designated group.
3.4 Skills Gap Analysis
The analysis must identify the skills required in the future state, outline the skills currently present, describe the gaps between them, and indicate the evidence source for each identified gap.
3.5 Risk and Mitigation Record
The record must also include an assessment of representation impacts, any availability‑sensitivity modelling completed, the justification for language requirements, a forecast of potential barriers, and confirmation that the required approvals have been obtained.
4. Structural Risk of Workforce Availability Reliance
Official Workforce Availability is derived from census data that is collected every five years, published with delays, sometimes affected by definitional changes, and often unable to capture rapid demographic growth. For visible minority groups in particular, recent labour‑market growth may significantly exceed earlier census benchmarks.
4.1 Resulting Risks
Apparent overrepresentation occurs when census-based availability is lower than current labour‑market availability, creating the false impression that representation exceeds expectations. False neutrality occurs when projected reductions appear compliant with census‑based benchmarks but nonetheless entrench underrepresentation compared to today’s labour market.
4.2 Compliance Context
The Employment Equity Act requires representation goals to reflect labour‑market availability. When availability benchmarks are outdated, relying solely on them can distort the interpretation of representation levels.
5. Required Workforce Availability Mitigation Controls
Although WFA remains the statutory benchmark, Step 1 must incorporate supplementary analysis to ensure accurate and equitable decision‑making.
5.1 Census Currency Disclosure
The Step 1 record must indicate the census year used, explain the time gap between census data and current workforce data, clarify whether definitions changed between census cycles, and confirm whether internal denominators align with census data. HR Analytics is responsible for this documentation.
5.2 Dual Benchmark Requirement
Before concluding that any group is overrepresented, representation must be tested against both official WFA and a growth‑adjusted sensitivity benchmark, with any discrepancies clearly documented.
5.3 Growth‑Adjusted Sensitivity Formula
Adjusted availability must be calculated by adding the difference between recent Labour Force Survey proportions and census proportions to the official WFA. For example, if visible‑minority WFA is 24 percent and the Labour Force Survey indicates 30 percent availability, the sensitivity benchmark becomes 30 percent and is used for modelling rather than statutory reporting.
5.4 Attainment Ratio Analysis
Organizations must calculate both the attainment ratio (internal representation divided by official WFA) and the sensitivity ratio (internal representation divided by adjusted availability). When the attainment ratio suggests overrepresentation but the sensitivity ratio suggests underrepresentation, the representation risk must be documented.
5.5 Future‑State Projection
Projected representation must be calculated using the formula for future-state representation, and the results compared to both official and adjusted availability benchmarks. If the projection falls below either benchmark, mitigation must be considered.
5.6 External Growth Differential
When the difference between Labour Force Survey availability and official WFA exceeds three to five percentage points, heightened caution must be applied before concluding that a group is overrepresented.
6. Equity Risk Areas at Step 1
6.1 Continuing Work Definition
When continuing work is defined using pathways historically available to some groups more than others, such definitions can disproportionately eliminate work performed by Indigenous employees, racialized employees, persons with disabilities, or employees recruited through targeted strategies. To mitigate this, organizations must document the operational necessity of each retained or eliminated function, the evidence supporting that necessity, the demographic concentration in those functions, and the rationale for eliminating any function disproportionately held by EE group members.
6.2 Opportunity Proxy Risk
Proxies such as acting experience, central‑agency experience, or executive‑level briefing exposure reflect unequal access to opportunity. These proxies must be replaced with competency‑based descriptions directly tied to the duties.
6.3 Geographic Consolidation Risk
Urban regions often have higher visible‑minority representation. Consolidation decisions must therefore be assessed for potential disproportionate demographic impact. HR Analytics must conduct this modelling before decisions are finalized.
6.4 Official Language Profile Escalation
Language profiles must reflect real duties rather than serve as indirect mechanisms to reduce headcount. The Official Languages function must confirm that language requirements are objective and defensible.
7. Barrier Forecast
Accessibility and DEI teams must assess potential barriers that may emerge from organizational changes. This includes determining whether remote‑work reductions may affect accommodated employees, whether consolidation disproportionately affects Indigenous or northern employees, or whether technology changes may impact employees requiring adaptive tools. Required mitigation measures must be documented.
8. Representation Floor Review
When representation falls below adjusted availability, departmental benchmarks, or occupational availability, the organization must explain why its decisions will not deepen underrepresentation. This requirement enables structural awareness without imposing quotas.
9. Required Sign‑Off Before Proceeding to Step 2
The Step 1 file must contain official WFA benchmarks, census‑year disclosures, sensitivity‑modelling results, representation projections, explanations of discrepancies, functional justification tables, skills‑neutrality reviews, language‑profile justifications, and barrier forecasts. The Employment Equity function must provide a written validation confirming that representation risks were reviewed. The delegated manager must certify that future‑state decisions were informed by workforce analysis, representation benchmarking, availability‑sensitivity modelling, and documented mitigation actions.
10. Structural Importance of Step 1
Every subsequent step of SERLO depends on the decisions made in Step 1. How continuing work is defined, how many positions are retained, and what skills are considered essential—all of these decisions shape the SERLO process. If Step 1 relies on outdated availability measures or lacks sensitivity modelling, the process may comply with procedural requirements while entrenching structural inequities.