This month, Parliament in New Zealand has unanimously passed the Equal Pay Amendment Bill.
Employers in New Zealand have been under a duty not to pay people differently on the basis of their sex or gender since 1972. The Equal Pay Act 1972 says that women and men should be paid the same for jobs of equal value, even if the jobs are different. Until now, claims for pay equity have gone to the courts for resolution.
Equal pay vs pay equity
Pay equity is about women and men receiving the same pay for doing jobs that are different, but of equal value (i.e. jobs that require similar degrees of skill, responsibility and effort). Equal pay is about men and women getting the same pay for doing the same job. The process for making an equal pay claim is largely unaffected by the passing of this Bill.
The process
The new Bill provides a more straightforward and accessible process for pay equity claims. The Bill clarifies what a pay equity claim involves, and sets out a bargaining framework for employers, workers and unions to negotiate in good faith. Importantly, it encourages use of mediation and dispute resolution services if agreement is not reached. Court action is now a last resort, which lowers the bar for employees wishing to bring a claim.
An arguable claim
Employers and unions need to raise an arguable claim and employers need to decide if they accept that the claim is arguable. It is important to note that accepting a claim as arguable does not necessarily mean that an employer agrees there is pay inequity, nor does it guarantee a settlement. It is simply a step towards the parties bargaining in good faith to analyse the situation.
Multi-employer and multi-union bargaining
A union can raise a pay equity claim on behalf of its members with multiple employers. If an employer believes that they have genuine reasons based on reasonable grounds for not being a part of the process, they will need to respond in writing to the union with those reasons. If there is disagreement, the union and employee will need to use the dispute resolution process.
Similarly, there may be multiple unions within a workplace, and these unions can raise a collective claim. If separate unions raise separate claims, they need be consolidated.
Practical effect
Earlier this year, while the Bill was still with the Select Committee, teacher aides settled a pay equity claim which led to pay increases of between 19% and 30%. The investigation took 18 months and affects an estimated 22,000 teacher aides. Other female-dominated industries which are expected to benefit from the new legislation include social work, healthcare administration, and education.
There are hopes that the new Bill will encourage collaboration and evidence-based decision making to address claims of pay inequity, as opposed to the inherently adversarial nature of court proceedings. The new process is more aligned with the good faith bargaining approach set out in the Employment Relations Act 2000, and changes in the Bill will be effective from late October 2020.
