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New Zealand: Announcement on pay equity

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Pay equity

Today, the government has announced it will update the Equal Pay Act 1972 and amend the Employment Relations Act 2000 to implement recommendations on pay equity.  This announcement signals a significant change to how pay equity claims will be dealt with and has important consequences for employers, especially in female dominated industries.

Background

Pay equity has come to prominence as a result of legal action by a union and an employee, Ms Kristine Bartlett, claiming that rest home carers have been underpaid because most carers are female.

In October 2014, the Court of Appeal examined this claim and considered that a set of principles for the implementation of pay equity should be developed by the Employment Court.  Kiely Thompson Caisley represented Business New Zealand as intervener in this case.

After this ruling, the government established a Joint Working Group to provide recommendations as to how to implement pay equity.  The government has now adopted the Joint Working Group’s report.

The Government’s Approach

The main element of the government’s approach is that pay equity claims are to be addressed initially in good faith bargaining, as opposed to being heard first in the courts.  In addition, there will be a pathway for resolving issues, as happens with other employment matters, including mediation and ultimately determination by the Employment Relations Authority.

Some key principles in determining and assessing a pay equity claim will be that:

  • The work must be shown to be predominantly performed by women.
  • The work may have been historically undervalued because it has been characterised as “women’s work”.
  • A thorough and objective assessment of the skills, responsibilities, conditions of work and degrees of effort of the work done by the women must be undertaken.
  • A male whose remuneration is itself distorted by systemic undervaluation of“women’s work” is not an appropriate comparator for checking if there is pay equity.
  • Comparator jobs are to be drawn first from within the business, similar businesses, or the same industry or sector when available and appropriate.

Further Information

More information concerning the government’s announcement can be found at https://www.beehive.govt.nz/release/govt-accepts-recommendations-pay-equity-0.