Equal Pay Amendment Bill Introduced

21 September 2018

Background

The Bill, introduced on 19 September, is the latest in a long line of proposals to amend the Equal Pay Act of 1972. 

People often use the terms Pay Equity and Equal Pay interchangeably, but they are different concepts.  The Bill addresses both issues. The Equal Pay obligations require that male and female employees be paid the same remuneration for performing the same work. Pay Equity on the other hand is about realigning the rates of pay for work currently or historically performed by women with low bargaining power.

The stated purpose of this Bill is to "improve the process for raising and progressing pay equity claims and eliminate and prevent discrimination, on the basis of sex, in the remuneration and employment terms and conditions for work done within female dominated jobs”. It aims to provide a simple and accessible process for claimants to progress a pay equity claim. The Bill:

• Establishes a process for pay equity claims.
• Prohibits differentiation based on sex in the rate of remuneration offered to employees for work that is predominately performed by women and has been historically or currently undervalued; and
• Enables employees to raise claims relating to sex discrimination in employment (equal pay claim); and
• Permits the courts or the Employment Relations Authority to award an amount of back pay in a pay equity determination.

Process:

• Employee(s) may raise a claim at any time. Claims must be in writing.
• The Employer must acknowledge receipt of the claim within 5 days and give notice to all other affected employees within 20 days.
• The employer must then decide whether the claim is “arguable”.  A claim is arguable if it relates to work that is predominantly performed by female employees and the work is currently or has been historically undervalued. The Bill sets a low threshold for determining whether a claim is arguable. The employer must give a decision within 65 days or it is deemed to have been accepted that the claim is arguable.
• If the claim is arguable, the parties must enter into pay equity bargaining to agree on an enduring settlement.
• The process will ordinarily involve an assessment of the work in question against comparable work.  Comparators may include any of the following:
  • Work performed by male comparators that is the same or substantially similar work,
  • Work performed by male comparators that is different but involves the same or substantially similar skills, experience etc
  • Any other comparators the parties consider useful.
• There is a dispute resolution process and the ERA can determine:
  • Whether a claim is arguable.
  • Whether the work is currently or has been historically undervalued.
  • What the terms and conditions of employment will be, provided other reasonable alternatives have been exhausted.
• The ERA or the courts can award back pay.

Consolidation

There is a process to consolidate claims.

• If an employer receives multiple claims that relate to similar work, those claims must be treated as one claim. In that case the claimants must agree on how the consolidated claim will be progressed and who will represent them.
• If multiple employers receive claims from employees who perform substantially similar work the parties may agree to consolidate.  In that case at the end of the process, each employer must enter into a separate settlement.

Pay Equity bargaining is distinct from collective bargaining:

• A pay equity claim may be raised at any time, including while there is a current collective agreement in place. 
• Failure to settle a pay equity claim can’t be used as a reason not to settle a collective agreement.
• Strike action in relation to pay equity bargaining is unlawful.

        But there are some similarities. 

• The parties must provide information to each other that is necessary to support the claims or to respond to them.
• Mediation is available to the parties.
• An application may be made to the ERA for facilitation, but the threshold is lower than for collective bargaining.  The only grounds are serious and sustained breaches of good faith and where sufficient efforts, including mediation, have failed to resolve a claim. 
• A claim may be raised under the Human Rights Act or the Employment Relations Act, but not both.

Backdating

• The maximum period in all cases is 6 years.
• Claims notified before the amendment is enacted may receive an award back to the date the claim was raised.
• Claims raised in the first 5 years after the amendment is enacted may be backdated to the date the claim was raised.
• Claims raised more than 5 years after the amendment is enacted may be backdated to the date which is 5 years after the date on which the amendment came into effect.  This is to provide encouragement to resolve claims as soon as possible.

Comment

While the cause is just, from early 2019 this legislation will result in wide ranging and time consuming discussions for many organisations over the next few years.  In the public sector the opportunities are obvious – think nurses, teachers, social workers and so on.  However, there will be many opportunities in the private sector also – think secretarial staff, cleaners, cafeteria employees, retail assistants and so on.

Either way, all the parties will all have to adjust to new relativities in the workplace.