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PAY EQUITY
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2018 marked 125 years since New Zealand women won the right to vote. Now, 2019 sees legislation aimed at formalizing a system for bringing pay equity claims move one step closer to enactment.

The Education and Workforce Committee have reported back on the Equal Pay Amendment Bill, which will now progress to the next stage in Parliament. The Bill will amend the Equal Pay Act 1972 to improve the process through which employees in traditionally female-dominated industries, who feel their work is undervalued when compared to similar industries, can raise pay equity claims.

‘Pay equity’ describes the idea of equal pay for work of equal value. It is important to note that this concept is wider than ‘equal pay’, where men and women carrying out the same, or very similar, work in a workplace are paid equally. It is aimed at ensuring equity between different workplaces and indeed industries by reference to skills and experience. 

This distinction is particularly important if you are an employer in a historically female-dominated industry; it is not enough to pay men and women carrying out the same role equally. You must also ensure that your employees have pay matching that offered for different jobs in separate industries but which similar levels of skill, experience and work demands.

Equal Pay Amendment Bill

The Equal Pay Amendment Bill, introduced last year, will provide structure and certainty to the process of making a pay equity claim. While the bill is a recognition of the importance of pay equity, it also places limits on the scope of such claims. In particular, existing claims will be discontinued, and need to be raised again under the new legislation.

Select Committee Report

The Select Committee recommends a variety of changes to the bill as introduced, which would clarify the pay equity bargaining process, allow the Employment Relations Authority to review settlement agreements, and allow certain employers to extend the time to decide whether a pay equity claim is arguable.

Importantly, the report provides guidance on some of the more ambiguous terms in the bill. It recommends that, when comparing rates of remuneration, employers compare work predominately carried out by women with work that has the same, or substantially similar, skills, responsibilities, and experience (rather than ‘service’). This change would better reflect the intent of the bill, as ‘experience’ encompasses the quality of prior work experience, while ‘service’ is much narrower.

The report also recommends clarifying that work ‘predominantly performed by female employees’ means work that is currently, or has historically been, performed by a workforce of which approximately 60% or more members are female.

The Committee has also recommended that an employee who raises a personal grievance against their employer for a pay equity issue should also be able to pursue recourse through alternative avenues up until the point that their grievance is lodged with the Authority. After this point, the employee is barred from the other options, which could include making a complaint to the Human Rights Commission pursuant to the Humans Rights Act 1993.

We will be keeping an ear to the ground as the bill progresses through Parliament. Our specialist team stands ready to assist if you would like further information about how this bill might affect you.

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