Industry weighs in on pay equity proposal

A Kensington Swan commentator looks at the ‘world leading framework’ in the pipeline for pay equity

New Zealand is following in the steps of Canada, the UK and Australia with the introduction of “a world-leading framework for the consideration of pay equity”.

It is set to be announced “in the not too distant future”, Minister for Workplace Relations and Safety Michael Woodhouse told the house in August.

Kensington Swan senior associate Catherine Fleming it’s likely to have implications for all employers and employees in female dominated occupations.  She said while it’s unclear what the new law will actually look like, the government’s framework will attempt to facilitate pay equity bargaining. 

“I think the hope is that employers and employees will be able to have a conversation about pay equity and arrive at an agreed settlement that recognises where women in certain occupations have been historically undervalued,” she told NZ Lawyer.

Historically, female dominated industries are affected by pay inequity.  Fleming said the health sector, education and secretarial and hospitality services are likely to be affected.

Recommendations by a Joint Working Group on Pay Equity included the ability for an employee to make a claim and if accepted, all relevant parties will resolve the claim through bargaining.  The claim would be referred to the Employment Relations Authority if the bargaining is unsuccessful.

But Fleming suggested that the Joint Working Group’s recommendations fall short, providing little assistance for dealing with how to compare the value of different jobs and how equal jobs might differ in remuneration legitimately as a result of a retention issue rather than discrimination.

“Presently, the recommendations do not even suggest the threshold at which an occupation is to be considered “female dominated’,” she added.

The next step in the proposal will be an opportunity for submissions, once the bill has been referred to select committee.

“Pay setting practices and records will have increasing importance once the new pay equity obligations come into play,” Fleming said.

“It will be interesting to see if this new wave of pay equity initiatives actually does manage to make a difference.”

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