In April 2017, the draft Employment (Pay Equity and Equal Pay) Bill was released for consultation. The aim of the bill is to ensure that female dominated workforces are paid correctly and to address any imbalance created by historic and systemic gender based undervaluation.
If implemented, the Bill would amend aspects of the Employment Relations Act 2000 and would repeal the Equal Pay Act 1972 to provide a set of guiding processes and principles to help employers and employees in making, assessing and resolving equal pay and pay equity claims in bargaining.
The Bill was proposed in response to the recommendations made by the Joint Working Group on pay equity principles. The Joint Working Group had been set up by the Government in response to the TerraNova pay equity case where female care workers claimed that their pay was undervalued compared to male workers with the same skill set in different occupations, and as a result of historical undervaluation and gender discrimination. Essentially, the Bill would allow employees to make three types of claims; pay equity, equal pay and unlawful discrimination based on gender. The Bill then sets out the processes for resolving each type of claim.
In an equal pay claim, the claim will be made in the Employment Relations Authority and the employee can seek lost wages and other benefits. Pay equity claims are more complex. The Bill provides that a pay equity claim has merit if the work is predominantly performed by females and there are reasonable grounds to believe the work has been historically undervalued and continues to be undervalued.
In terms of the process, the key features of a pay equity claim are:
- An employee may raise a pay equity claim with their employer;
- Upon receiving the claim, the employer must assess and determine the claim on its merits;
- he employer must acknowledge the claim within 7 days and notify other affected employees within 30 days;
- The employer’s decision to refuse a claim can be challenged in the Employment Relations Authority and a penalty can be imposed;
- Where the employer accepts a claim, the parties must begin bargaining;
- The new Act will outline how to assess the work performed as compared to the work of comparable occupations. Such comparable work may include work performed by predominantly male workforces that is the same or substantially similar (or involves similar skills, experience, responsibilities etc);
- Where bargaining reaches an impasse, the parties can access the Employment Relations Authority’s mediation services (including a determination on fixing the terms and conditions of employment).
Submissions on the Bill closed in May 2017. If the Bill passes, it is likely to generate some interesting cases assessing “comparable work” and could have a significant impact on female dominated industries.