Employment legislation is on the move once again with the Equal Pay Amendment Bill (Bill) having passed the select committee phase. It now awaits its second reading.
The Bill aims to improve the process for raising and progressing pay equity claims, which target the elimination of discrimination on the basis of sex from terms and conditions of employment (including remuneration) for work done within female-dominated industries.
More specifically, the Bill also:
- Amends the Equal Pay Act 1972 to establish a process for pay equity claims, while still retaining the rights and processes for claimants to raise equal pay and unlawful discrimination claims; and
- Prohibits differentiation based on sex in the pay rates offered to employees for work that is predominately performed by women and has been historically or currently undervalued; and
- Establishes a simple and accessible process for resolving pay equity claims; and
- Permits the courts or the Employment Relations Authority (Authority) to award back pay in a pay equity determination.
As matters currently stand, pay equity claims are instigated through employees providing evidence of historic or current undervaluation of their work. Following this, there are three possible outcomes to a pay equity claim:
- The employer does not agree and the claim does not proceed; or
- The employer agrees, bargaining begins, and the parties examine ‘comparators’ (work performed by male comparators that is the same as, or substantially similar to, the work to which the claim relates) to establish an agreement on the claim; or
- The employer does not agree and the employees challenge this decision through a tiered dispute resolution process: Mediation à Facilitation à Courts. At any point the parties can be referred back to the bargaining table.
The select committee has recently recommended amendments to clarify aspects of the Bill, including:
- The legal avenues of pay equity claims under the Equal Pay Act 1972 and complaints made under the Human Rights Act 1993 are not barred if an employee raises a personal grievance under the Employment Relations Act. These other avenues would only be blocked if the employee lodges a personal grievance with the Authority.
- Timeframes for an employer to consider a claim is amended to 45 working days and allowing employers to request an extension of time for consideration if there are genuine reasons based on reasonable grounds (high threshold) on which to do so.
- Bargaining process:
- Removal of historical valuation as a consideration for whether work is currently undervalued and simply consider it as one factor relevant to determining whether a pay equity claim is arguable.
- Specifying that alternative processes to resolving claims should also be free from gender bias.
- Insertion of requirements for a review process to ensure ongoing pay equity.
- Making it clear that an unsettled pay equity claim is not a genuine reason for failing to conclude collective bargaining (which would require amendment to the Employment Relations Act 2000).
- Penalties: Removing the Labour Inspectorate’s power to bring an action with the Authority to recover penalties in relation to pay equity. Instead, the Authority would be required to take into account improvement notice defaults when determining a penalty.
It is important to remember that pay equity claims differ from equal pay claims, which specifically concern the situation where women are paid less despite performing the same jobs as men. However, the term pay equity is commonly used to refer to the principle that women and men should receive the same remuneration for doing jobs that are of equal value.
Watch this space.
Workplace Law team
If you have any queries in respect of the above, or any other Workplace Law issues, please contact a member of Lane Neave’s Workplace Law team:
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